Abenomics kicked off in early 2013 Shinzo Abe’s plan to revitalize its beleaguered economy through three sequential steps or arrows:
Abenomics Effects: Year One Since the BoJ recently appointed chairman, Haruhiko Kuroda, announced its massive monetary initiative in early January - adopting a target to achieve a 2% increase in consumer prices with open-ended asset purchases - lots of things have happened:
Abenomics's only winners: Japanese Exporters There are several doubts concerning Japan chances to exit its everlasting economic comatose status in spite of recent monetary and fiscal policy measures undertaken. In this way, BoJ “nuclear” QE action is to double the monetary base as to target 2% in 2014, but beware:
Therefore, Abe’s third arrow proposals are essential and the real game-changer to the country's structural problems (demographics, immigration, energy policy, etc). Only when these are phase in, Japan will have a real chance of experiencing an internal demand recovery. Hence, there's only one certain thing at the moment: JPY weakness is here to stay and overseas-oriented firms will continue to monetize from this currency situation. Equity Screening: The Quest for Cheap Japanese Exporters A quantitative methodology was conducted in order to shortlist out of the vast universe of listed companies available in Japan:
Fundamental Scoring and bottom-up due diligence In-house quantitative fundamental scoring is applied to our shortlisted names in order to ascertain what four are the best picks to play the Japanese Exporters Basket:
To sum up, Abenomics will have it very difficult to succeed and revamp internal demand. Only one thing is for sure: BoJ first monetary arrow will continue weakening JPY and benefiting Japanese companies whose business is mainly export-driven. The basket proposed composed of Chiyoda, Isuzu, Bridgestone and Fujitsu General along with a short position in Topix Futures is the best possible way to play this trade without having to be exposed to excessive portfolio volatility. Disclaimer: the blog is intended to convey investment ideas and, market views , yet they are not a solicitation or recommendation to buy/sell/hold securities but merely investment ideas that should NEVER serve as the basis of the reader trading decisions. This website and its reports are for general information purposes and any investment decision should be discussed with a financial adviser before taking place. The investment ideas displayed here could have been implemented at an earlier date than the one stated at the blog's post date; for which reason the latter dates do not represent accurate and timely entry/exit points in order to protect those investors with whom the blog author has a fiduciary agreement.
1 Comment
|
Carlos Salas
LINKS Data Science & ML NYC Data Science Blog Data Science Central Towards Data Science Kaggle Blog Analytics Vidhya Quant Finance Quantocracy MoneyScience QuantStrat Trade R Investments Market Screner Macro Calendar Corporate Calendar Advisor Perspectives Trading Economics Portfolio Visualizer Datasets Opendata Data.Gov World Bank Quandl |