November 22 Investment Market Analysts and Traders Statements (Updated 19:00)

■ Wall Street Journal紙

Mora Special Prosecutor,

KUSHUNER U.S. President-elect's senior adviser has been reporting that during the U.S. presidential election, contact with Russian officials was investigated,

and it suggests possible dollar weakness amid Russian gate suspicions.

■ Korean Financial Supervisory Service

“The won’s ascent pace is faster than other currencies.”

“The Korean Financial Supervisory Service is watching currency movements.”

■ Domestic financial institutions

Amid lingering uncertainty around North Korea, which has been re-designated as a state sponsor of terrorism by the United States,

speculators began to scale back円 shorts before the Thanksgiving break,

which is reflected in the dollar/yen’s lack of upside momentum.

Overseas speculators such as funds

“haven’t given up on the strategy of buying dollars and selling yen, but with earnings reports and Thanksgiving approaching,

they seem to be lightening positions temporarily and preparing to reset in December,

and many appear to intend to re-initiate yen selling.”

■ Commerzbank FX Strategist Esther Reichardt

“An extended period of time for German political situation to settle would be the worst-case scenario,

but the market does not anticipate this issue to develop into something extraordinary,

and from a broader perspective, the economy is solid.”

■ BB&T Wealth Management Senior Vice President, Buggy Helwig

(Regarding U.S. stocks)

“Investors are at a time when they should buy rather than sell more,”

pointing out an upward bias.

“Equities currently have the most favorable risk-adjusted characteristics.

Volatility is low and the trend is upward,”

and he said, “Tech stocks at present are a sector that people are satisfied with, and funds will flow in.”

■ Brown Brothers Harriman Chief Global FX Strategist

Mark Chandler

(On the dollar/yen and dollar/franc decline on the 21st)

He suggested that it reflects a strong correlation between the two currencies and the U.S. 10-year yield rather than a flight to safety.

(Regarding the 10-year yield US10YT=RR at 2.36% being slightly lower than the previous day)

U.S. economic growth remains solid, but

there is no real rise in prices, which is a backdrop for the Treasury yields being subdued.

■ Overseas traders

Real-money players and macro investors have not reacted much to the latest news about Germany

■ Goldman Sachs Global Equity Chief Strategist, Peter Oppenheimer

“Investors can be confident in the strength and durability of the current growth cycle,” he notes in a report.

“The long duration of this cycle has been behind the crisis, but it also includes a recovery from the crisis, and until recently its strength has lagged the average.”

He said.

■ Commerzbank

He pointed out that Germany’s political flux may become a tailwind for nearby governments’ bonds.

■ Mitsubishi UFJ Morgan Stanley Securities Senior Bond Strategist InatomoKatsutoshi

“Yesterday’s bond market showed resilience despite stock gains, reinforcing strong supply-demand expectations.”

“Today, the Bank of Japan is set to notify purchases targeting medium- to long-term bonds.

Although concerns remain about reductions in purchases for medium-term bonds (remaining maturity 1 year to 3 years) that were cut on the 17th,

in the near term there is little chance that reduced purchases will break the demand-supply balance,”

and he expects a steady-to-firm outlook.

Regarding the Government Bond Market Special Participants Meeting

“The theme is next year’s government bond issuance plan; some reports suggest

that 30-year and 40-year issues may be reduced. In the bond market, theブルフラット化 has already priced this in

as a development,”

he notes.

He adds, “For maturities under 20 years, we are looking for any clues as to whether reductions will occur.”

■ Julius Baer Private Bank Asia CIO, Boshka Rakuminlaya

Bakhar Ramanarayan

“We’ve been bullish on Japanese equities for a year now. Since then, we briefly pared back exposure to equities overall.

When we recently increased exposure again, we focused on buying more of the Japanese and Chinese stocks in particular. It was only about two to three weeks ago.”

“There are several reasons for being bullish on Japanese stocks, the biggest being strong corporate earnings.

In the upcoming earnings season for July-September, results are surpassing market consensus.

Positive earnings surprises are the most effective driver of stock price gains.”

“We expect continued positive earnings surprises in both Japan and China up to 2018.”

“It’s true that prices have risen to record highs, but at our firm we don’t plan to sell here; we still want to buy more.

Once we commit to an investment, we tend to hold it for at least 1–2 years.”

“Some people worry about absolute price levels being too high. It’s true that there is some consolidation lately,

but if you look at it relative to other assets, risks are high across all risk assets,

and if you say they are overpriced and refuse to invest, there would be few assets left to allocate.”

“We should assess in relative terms, not absolute levels.”

■ Macquarie Mining CEO Rob Macquarie

He forecasts a potential price of over $5,000 within five years.

With persistently low interest rates keeping gold as a haven for geopolitical and financial risks,

investors chase returns from gold investments.

Generally, higher interest rates make interest-bearing assets more attractive, but if markets re-enter a correction phase, gold’s appeal should rise further, he said.

■ Domestic financial institutions

(Regarding December issue of Treasury Bond futures)

The Dec futures closed higher by 13 sen at 151.15 yen, extending gains.

Global stock markets continue to rise,

but because upside in equity prices is limited, speculators are buying safe assets like bonds in a front-running manner,

■ Domestic securities companies

(Long-term yields fell to 0.020% when the 10-year JGB futures’ eligible delivery bonds hit a low of −0.10%, the first time in about two months since Sep 11)

“If long-term yields edge closer to 0%, bets on BoJ asset purchases could rise,

and with the cheaper cheapness of the 10-year note, there were some moments of profit-taking toward the end.”

■ Asset Management One Strategist, Hitoshi Asaoka

(Regarding domestic equities)

“With Thanksgiving approaching and material shortages, equities have risen on the basis of improvements in corporate earnings already announced globally.”

Further, if the U.S. tax reform bill includes full expensing of new investment,

“the recovery in capex that has been postponed could accelerate, potentially boosting Japanese corporate profits further.”

■ Nomura Securities Foreign Exchange Dept, Koichi Takamatsu Executive Director

On dollar/yen

“Yellen’s remarks were perceived as somewhat dovish, leading to selling pressure.”

the dollar/yen and other pairs are approaching technical levels,

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