Bearbull Global Investments

STAGFLATION RESHUFFLES THE DECKS FOR JAPANESE ASSETS 3/3

28 Nov

STAGFLATION RESHUFFLES THE DECKS FOR JAPANESE ASSETS 3/3

Posted by BearBull Group In Investment Insight 0 comment

The Japanese Government Bond (JGB) market is currently undergoing a severe stress test. Yields have decoupled from negative Q3 growth fundamentals, reacting almost entirely to the shock October 3.0% inflation print. The 10-year yield has surged to a new baseline of 1.8%, indicating investors now demand a significantly higher risk premium to compensate for monetary erosion. The market is aggressively pricing in a Bank of Japan (BoJ) response to persistent core inflation.

Key Points

  • Exports stall, GDP falls by -0.4% in Q3
  • Possible GDP recovery in Q4, but on a knife edge
  • Exacerbated dichotomy in sectoral PMIs
  • Consumer confidence remains hesitant
  • Inflation remains well above the BoJ’s target
  • Bank of Japan caught between forced normalization and recession risk
  • Specter of stagflation pushes up yield curve
  • Without rate hike, yen remains under pressure
  • Stagflation risks threaten Nikkei
Read more
© 2024 BearBull Global Investments Group | All rights reserved .

BearBull Global Investments Group Limited is licensed by the Dubai Financial Services Authority (DFSA)
Legal Privacy Policy Sitemap
* Type a keyword then press Enter