Arbitrage that plays Japan and the US against each other is unreasonable! [From Tomoaki Sugimura's e-mail newsletter]
From the investment newsletter “Sugimura Tomo Investment Salon” by Sugimura Tomio, provided by GogoJungle, here is a small excerpt from today's distributed edition.
The results of the House of Councillors election were almost as forecast. However, it did not turn into the Liberal Democratic Party’s “landslide.” It was certainly a strong performance, but… On this front, it seems we cannot say they achieved the two-thirds majority. I wonder if the pension issue did the damage.
The focus from now on will shift to the Japan-U.S. Trade in Goods talks, the October consumption tax increase, and the scale of the accompanying economic measures. In particular, foreigners are concerned about an economic slowdown due to the tax hike. That said, the Abe administration is prepared. There is not much to worry about.
Currently, domestic institutional investors and hedge funds are adopting a long/short strategy of buying U.S. stocks and selling Japanese stocks. Arbitrage trading. This has created a situation where “the U.S. market is thriving, but the Tokyo market is not.”
From ‘Sugimura Tomio Investment Salon’ (Sugimura Tomio)quoted.
There is much talk about the deterioration of the economy due to the consumption tax increase, but Sugimura believes that the current administration will be fully prepared. While U.S. stocks are performing strongly, Japanese stocks seem to be under selling pressure somewhere, and a correction looks likely. (Editorial department)
