Taps Coogan – July 10th, 2023

David Roche, Independent Strategy President and long-time market and geopolitical observer, recently spoke with CNBC about his outlook for Japanese markets. Beyond his long held and recently vindicated bullishness on Japanese equities, he expects a rolling back of yield curve control and calls it one of his highest conviction views.

 

Some excerpts:

“My view is that Uedo, the new BoJ Governor has been – I hate to say this – but of a damp squib. A lot of people expected him to do more and more quickly to return Japan to a more normal monetary policy… I expected yield curve control to be dropped progressively, first on the 10-year and later on the 2-year, which would have, of course, given Japan a much steeper yield curve and a stronger currency. Now, clearly people are expecting the Bank of Japan to continue being pretty weak… My personal view is that Uedo is going to be forced to take much more dramatic action down the road. Inflation is going to force that on him. The recovery in the Japanese economy is going to force that on him and essentially we will see a much stronger yen, steeper yield curves, and much higher JGB yields, certainly at the 10-year level. That would be my forecast, one of the biggest convictions I would have actually… on a 12 month  basis

There is more to the discussion so enjoy it above.