Certainly investors like what they're seeing. Abe says this about the three arrows:
"Abe calls his approach the "three arrows" -- monetary easing, public investment and structural reforms -- which, he believes, taken alone can be bent but together will be invincible. From the moment he came to power, he has taken a different approach than leaders in the West, including his decision to replace Masaaki Shirakawa, the cautious head of the Bank of Japan, with an Oxford-trained former Finance Ministry official, Haruhiko Kuroda, who has committed to do "whatever it takes" to make economic growth a priority."
http://diaryofarepublicanhater.blogspot.com/2013/05/why-shinzo-abe-is-not-market-monetarist.html
Investors say this is a win:
"Aggressive fiscal and monetary policy coupled with structural reforms are presenting huge investment opportunities in Japan, widely followed hedge fund manager Dan Loeb said."
"Abe calls his approach the "three arrows" -- monetary easing, public investment and structural reforms -- which, he believes, taken alone can be bent but together will be invincible. From the moment he came to power, he has taken a different approach than leaders in the West, including his decision to replace Masaaki Shirakawa, the cautious head of the Bank of Japan, with an Oxford-trained former Finance Ministry official, Haruhiko Kuroda, who has committed to do "whatever it takes" to make economic growth a priority."
http://diaryofarepublicanhater.blogspot.com/2013/05/why-shinzo-abe-is-not-market-monetarist.html
Investors say this is a win:
"Aggressive fiscal and monetary policy coupled with structural reforms are presenting huge investment opportunities in Japan, widely followed hedge fund manager Dan Loeb said."
"Speaking at the Skybridge Alternatives, or SALT, conference here, the founder and CEO of Third Point, with $13 billion under management, said the slow-moving Japanese economy is ready for a breakout."
"We're really focused on Japan," he said.
So here's my new investment theory. You there Nanute? I like the idea of shorting the Yen. It's already been down 30% since Abe's announcements back in November relative to the dollar and I think this is only the beginning. My premise is that the more accomodative monetary and fiscal policy are the more you want to by their equities and short their currency.
"The yen hit a four-year-low of 101 against the U.S. dollar on Friday, extending losses beyond the key 100-mark amid signs that Japan's bid to reflate its economy is finally leading domestic investors to look for higher yields elsewhere."
"According to data from Japan's Ministry of Finance, Japanese investors became net buyers of foreign bonds in the last two weeks, buying 309.9 billion yen ($3.1 billion) in foreign funds in the week to May 4. They purchased 204.4 billion yen worth of foreign bonds in the previous week."
"While the data is only for two weeks, if this trend of capital flight continues, the yen could see more downward pressure in the months ahead, say analysts."
"That capital outflows data pushed the yen to a record low in early Asian trade after it broke through the psychologically-key 100 barrier overnight on strong weekly U.S. jobless claims numbers."
Back in December Noah Smith warned both Monetarists and Keynesians in turn about Abe as being a fake. He's since admitted he was wrong about that. At this point I think everyone wants to embrace Abe for his own. However, he's a Keynesain as he believes in public investment as well as monetary easing.
P.S. I'm doing a practice Forex account and I'm long the euro vs. the dollar, the dollar against the yen, and the pound against the yen. I've already used over $20,000 margin on a $50,000 account-it's play money of course, At present it doesn't look too bad. I started down $800 and then I got to positive. Right now it's fighting to get back there again.
Of course, if I ever do play I won't have anything like a $50,000 margin.
No comments:
Post a Comment