Bloomberg (gated) convey the views of Koji Nakatsuka, chief investment officer for Japan equity at Allianz Global Investors.
On Japanese stocks:
- sees Middle East tensions and currency volatility as temporary
- sees solid corporate fundamentals and the long-term artificial intelligence outlook provide support
- “If everything gets normalized, the Japanese stock market has an upside potential towards the end of the year. The Nikkei may return to its record high levels by year-end”
On FX:
- highly likely that the yen will weaken to 155-158 per dollar
- but “most market participants are already expecting the government to intervene, so it’s difficult to continue buying the dollar and shorting the Japanese yen”
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Its interesting that if this is correct:
- most market participants are already expecting the government to intervene
then that sets up the next leg higher in USD/JPY.
USD/JPY daily candles:
