Not exact matches
He also said that the Bank of Japan doesn't realize that the odds are stacked
against them because whenever there's a problem in emerging markets, the
yen is seen as a safe haven, which causes it to
strengthen.
Specifically, the robust productivity growth achieved by the United States in the 1990s explains three - quarters of the
strengthening of the dollar
against the
yen and two - thirds of the dollar's appreciation
against the euro in that decade.
Ultimately, we see the dollar weakening
against the euro as real rates in the Euro Zone become more positive and
strengthen versus the
yen because inflation in Japan is picking up due to accelerating wage growth.
The
yen hit historic lows
against the U.S. dollar in 2016, and though it had
strengthened by December, it still was very low, spurring an increase in international travel demand.
Conversely, in a bull correction the U.S. dollar typically
strengthens against emerging market currencies and the
yen doesn't budge.
A
strengthening of the
yen against the dollar after the poor factory data weighed heavily on Japan's exporters.
The dollar
strengthened against the euro but fell
against the
yen.
On the other hand, if the
yen strengthens against the dollar, it will immediately... it improves the dollar return on equity, while making the business less competitive abroad.
In these periods both domestic and international investors choose to retain their capital in the
yen, resulting in the
yen strengthening against other currencies, such as the euro.
If the
yen strengthens against the dollar, JDG should do better than a hedged portfolio of Japanese stocks.