Business / Financial Markets Jul 24, 2023
Japan’s mom-and-pop traders boost emerging-market currency bets
Japanese retail investors have increased bets on volatile currencies.
Japanese retail investors have increased bets on volatile currencies.
Consumer prices excluding fresh food and energy costs have seen price gains hovering close to a high of more than four decades.
Last year, the currency’s slide toward ¥146 triggered intervention, and in the buildup to that there were repeated official warnings.
An extended period of weakness could counterintuitively lay the ground for long-run strength should it help the BOJ boost growth and finally pivot from supereasy monetary policy.
Gov. Kazuo Ueda has repeatedly signaled his intention to take time before making any major changes to the central bank’s stimulus.
Currency swaps protected more than 11% of overseas securities owned at the end of the fiscal year to March, according to earnings reports from nine of the largest life insurance companies.
The deficit from spending on such services reached ¥4.8 trillion last year, almost 90% of Japan’s services account deficit.
Ueda and his fellow board members are forecast to keep interest rate and asset purchase settings unchanged at the end of the two-day meeting Friday.
The strategy, among the first to be disclosed by Japanese life insurers this fiscal year, may foreshadow a renewed wave of selling by some of the biggest investors in global bond markets.
Early inflation figures for Tokyo, due Friday, are expected to show core consumer price growth slowing a full percentage point to 3.3% in February, from January’s four-decade high.