There is a high possibility that high-interest-rate currency countries will continue to lower rates rapidly! How will Japan respond to the yen appreciation? [From Mr. Rikio Shima's newsletter]
From the investment newsletter "Shima Rikio's Real-Time Trading in Practice" by Shima Rikio, provided by GogoJungle, here is a small excerpt from today's edition.
The post-cutting rate press conference of RBNZ (Reserve Bank of New Zealand) Governor ora was surprising. Considering that many countries around the world are falling into negative interest rates, New Zealand is highly likely to be forced to adopt a negative interest rate policy in the future, and he clearly stated that preparations are being examined with "no letdown." Even formerly high-interest-rate currencies may soon enter negative territory. If so, the yen, which has little room for monetary easing, would likely come under upward pressure.
Currently, the market suspects that GPIF and others are around 106 yen and are supporting dollar purchases. Seeing that it doesn't easily fall, that possibility is quite plausible. In the past, there were PKO-type measures, Bank of Japan stock-buying support, and forex intervention by quasi-public institutions; Japan tends to try to control the market. Because the market moves irregularly, personally I do not like Japan's market. As long as market intervention continues, a revival of the Japanese economy seems unlikely.
What GPIF needs now is to increase hedges against foreign exchange. If the world moves toward monetary easing, yen appreciation cannot be avoided. It must be ensured that losses are not incurred at that time. To do the opposite would be foolish. Cosmetic market interventions will also blow away sooner or later.
“Shima Rikio's Real-Time Trading in Practice” (Shima Rikio)quote.
Following emerging markets Turkey and South Africa, rate cuts are sweeping through developed nations such as the United States, Australia, and New Zealand. As there are hints of rate cuts in Europe in the future, let's watch how Japan responds. (Editorial staff)
