Australian (ASX) Stock Market Forum

Japan Exposure

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Garpal Gumnut said:
Thanks all for starting and keeping this Japan Exposure thread going. It is quite a common topic on USA stock forums so there may be a few dollars to be made in looking at an etf of Nipponic shares.

The currency aspect is one that has stopped me from seriously looking at it. As well as the strangeness of Japanese culture. It is probably the only country I have visited that is full of foreigners, the Japanese. They are quite a xenophobic mob with a significant low birthrate and no immigration which long term does not bode well for industry and services which I believe make up a significant proportion of their economy. The Japanese cousins also have real enemies close by in the form of Korean and Chinese cousins who dislike them intensely and still harbour hurt over their military atrocities back in the 1930's and 40's.

I have looked in to the https://www.blackrock.com/au/individual/products/273434/ishares-msci-japan-etf .This is originally a US denominated etf transferred to Australian domicile in 2018 and now quoted in $AUD.

iShares MSCI Japan ETF (IJP).​


It's fees are reasonable and it has shown a good profit, all in the accompanying graphic, as well as its investment sector profile..

View attachment 177648

I thought I'd show the currency over the last two years which indicates that the fund may be fighting headwinds with a weaker YEN over the next few years.

View attachment 177649
gg
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don't forget the Russians and Mongolians , while the rest of South-East Asia don't make a big thing of it i don't see many trying to form close ties to Japan either , it will be interesting to see if Japan can be convinced to abandon it's non-aggression pact and really put a black hole in it's budget ( assuming automation will replace many workers , to free up 'boots on the ground ' )

Japan might easily be a victim of sanctions backlash , trying to adhere to sanctions placed by 'allies '

much will depend on if the Japanese national spirit has been crushed , or just waiting to be inspired once again

i would rather watch and learn from Japanese endeavors than tilt my investment cash there ( i assume the US will continue to discretely prop up Japan so it can keep military bases close to China )

one thing to consider is .. if Australia increases it's trade war against China , will Japan become a major importer of Australian resources ( replacing China )
 
A dominant theme in Japanese business practice has been the rise of Keiretsu, a term referring to a business network made up of different companies, including manufacturers, supply chain partners, distributors, and occasionally financiers.
 
Screenshot_20240527-080558_Google.jpg

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as per the infographic, during the post -war rise of the Japanese economy, these structures were useful. For the last few decades, the ossification has probably acted as a brake.

The sheer size of their trading houses , the Sogo shosha, is amazing.

en.m.wikipedia.org

Wikipedia, the free encyclopedia

en.m.wikipedia.org en.m.wikipedia.org

From the viewpoint of exposure to its markets, going with a fund or Nikkei index makes sense as it would be hard to gain any advantage by unearthing hard- to -understand nuggets, I suspect. On conventional metrics, the Japanese sharemarket is cheap, but this has been the case for a while.
 
This Currency Is Set Up for a Major Reversal
By Brett Eversole, editor, Stansberry Research
It might not be front-page news... but the Japanese yen is in the middle of a collapse.

This downturn has been dragging on for years. The currency hit its most recent peak in early 2021. And it has gone nowhere but down ever since.

All told, the currency has fallen 34% in three and a half years... a brutal decline for a major global currency.

But one sign tells us that a reversal could happen soon.

Sentiment is near its most bearish level on record. And as I'll explain, the last time we saw pain like this, the yen took off on a multiyear rally...

Calling this a "currency collapse" is no exaggeration.

The yen has not only lost about a third of its value... but it also recently dropped to a three-decade-plus low in the process. Take a look...
2ab63d3a-0490-4d4f-ad28-d226f94c3e98.png


The last time we saw these levels was in 1990... just as the 1980s Japanese bubble was beginning to burst. Plus, as the chart shows, the recent decline has been quick and severe.

Lots of folks are worrying the yen could fall much further from here. But that's the wrong assumption to make right now...

You see, everyone believes the decline will continue. They've left this currency for dead. And that means sentiment is set up for a major reversal.

We can see this clearly by looking at the yen's Commitment of Traders ("COT") report...

This weekly report shows us what futures traders are doing with their money. When these traders all bet together on the same outcome, the opposite tends to happen. And as you can see, they've recently been betting against the yen at a wild pace...

21609111-c4d6-4fdb-8fc7-a3ba2490ddd5.png


The COT has fallen alongside the yen in recent months. It recently hit its most negative reading since mid-2007. And as it turns out, that was also a darn good time to bet on a yen reversal...

The currency was falling back then as well. It was down nearly 20% in two and a half years. But once sentiment hit an extreme, the yen started to rally...

It moved higher in value for more than four years. The overall gain was 63% – a huge return for a major currency.

We could be on the cusp of a similar move right now. The yen has crashed in recent years. And recently, futures traders have been betting against it at crazy levels.

That means a reversal is likely. And if it ends up being a sustained rally, the yen is likely heading much higher than we've seen in years.

Most folks don't expect a turnaround from this currency right now. But the contrarian bet is that we should see a much stronger yen in the months ahead.

Good investing,

Brett Eversole
 
one thing to watch is if Japan is obliged to sanction both Russia and China ,

currently China and Japan have an agreement for direct goods swaps and direct currency swaps

extra tensions between China and Japan could be very painful for Japan

a lesser , but future risk is that Korea unifies ( and has an anti-Japanese sentiment )

some think the US Fed ( and US Treasury) will come to the rescue in some form ( so Japan doesn't have to dump US Treasuries )

this could get messy despite the weakness the Yen is still a major global currency ,
 
Japan 's Norinchukin bank is planning on selling USD 65 billion of out of the money US and Euro securities to shore up its deteriorating balance sheet.
From Nikkei Asia
TOKYO -- Norinchukin Bank will sell more than 10 trillion yen ($63 billion) of its holdings of U.S. and European government bonds during the year ending March 2025 as it aims to stem its losses from bets on low-yield foreign bonds, a main cause of its deteriorating balance sheet, and lower the risks associated with holding foreign government bonds.
The company's net loss for the year ending March 2025, which was previously forecast to top 500 billion yen, will rise to the 1.5 trillion yen level with the bond sales.
The bond sales, amounting to almost a sixth of the bank’s global portfolio, will take place by the end of March, the bank said. The lender now expects to report a net loss of 1.5 trillion yen for the current fiscal year, triple the previous estimate of 500 billion yen, the spokesperson said, confirming an earlier Nikkei report. The final loss amount may change, depending on how much the bank can sell and market can absorb.
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This has got to have an adverse effect on the bond market.
Mick
 
BossMan. said:
View attachment 179151

View attachment 179152

I like Japan still (I dont hold any Japanese related funds/stocks) but wont be touching it until there is more certainty regarding the BOJ policy.

For those with bloomberg here is the link to the article, quite an interesting read
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Thanks for the info @bossman, I can see this happening in the chart, I don't think that the current support zone will hold and the market will move down to the next support zone around $64. I'll be watching to see if buyers come in at that price.
1719112177195.png
 
divs4ever said:

Japanic Monday: Japanese Bonds, Stocks Halted After Plunging Into Bear Market As Everything Crashes Everywhere​


Japanic Monday: Japanese Bonds, Stocks Halted After Plunging Into Bear Market As Everything Crashes Everywhere | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

hmmm is this opportunity in some Asia-focused ETFs
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That assumes that this is a one day wonder and normal service will be returned shortly.
I am betting there is a much bigger rout to unfold.
Mick
 
mullokintyre said:
That assumes that this is a one day wonder and normal service will be returned shortly.
I am betting there is a much bigger rout to unfold.
Mick
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well for the ASX a 'healthy retrace ( 10% from the peak ) is very much due , but will it stop near 10% even 20% retraces aren't particularly rare

and Japan well it has been a miracle of can-kicking for decades , maybe there is nobody with clever feet
 
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a more nuanced view .
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"Japan is the world’s largest creditor nation and has approximately $4.4 trillion invested abroad in portfolio assets. This number excludes foreign direct investments in factories, etc.

"In addition, we have the Yen carry trade where investors borrow in Yen and invest in higher yielding assets.

[A] sudden, and powerful, move in the Yen has led to a reversal in some of these transactions, and contributed greatly to what could be described as the ‘Great Deleveraging.’

[In addition,] being long Japan has been a very popular trade with global fund managers.

In brief, we saw significant selling by non-Japanese investors (hedge funds), coupled with capitulation by Japanese retail traders.

The decline in Japanese bank stocks is one for the record books.
 
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