Changes in Japan and Merry Xmas

There has been an important change in the Land of the Rising Sun, at least from a monetary standpoint. The long-term chairman of the BOJ Kuroda has surprisingly decided to let Japanese yields rise, months before his term ends. We see many consequences of which we highlight three: 1/ The carry trade (borrowing cheap Yen at low interest rates and investing in higher yielding assets abroad) that has been so successful is being challenged 2/ The USD is coming under pressure and 3/ There will be less demand for US Treasuries as Japan is still the biggest holder of US government debt and Japanese investors may find other investment opportunities in their local market. It is definitely too early to write off Japan in a global asset allocation. This is the last daily graph of the year after an eventful year 2022 and I wanted to thank all our readers for their interest and support. I also wanted to wish you and your families a merry Xmas and a good start into 2023.