Japan Economist, Japan Macro Advisors

Takuji Okubo

Japan Economist

Concise and Insightful Analysis on Japan Economy

Japan Macro Advisors

Our mission is to provide a concise and timely analysis on the Japanese economy for the benefit of global audiences. Communication, especially in foreign languages, has always been a weakness for the Japanese, which was fine when Japan's economic might attracted foreign media and various other institutions to study and report on Japan - such days are long gone. In the last two decades, we saw foreign institutions reallocating their resources from Japan to other more exciting parts of the world. As a result, when we read reporting on Japan in foreign media, we sense a subtle but noticeable decline in the depth of understanding what is actually happening in Japan.

Macroeconomics

<p>For years, ROE among Japanese companies languished in low single digits. No more. The average ROE rose to 9.1% in the fiscal year 2017, clearing the 8% "minimum" target set by the influential government commission Ito Report published in 2014. The Japanese companies managed to raise their ROE not through financial leverage but through higher ROA and fatter profit margin. We find it remarkable that non-manufacturers, long considered an inefficient part of Japan Inc. are enjoying an unprecedented level of ROA in recent years. In our view, the rise in ROE is combined results of the cyclical upturn in the economy and the improvements in the corporate governance in Japan. </p>

For years, ROE among Japanese companies languished in low single digits. No more. The average ROE rose to 9.1% in the fiscal year 2017, clearing the 8% "minimum" target set by the influential government commission Ito Report published in 2014. The Japanese companies managed to raise their ROE not through financial leverage but through higher ROA and fatter profit margin. We find it remarkable that non-manufacturers, long considered an inefficient part of Japan Inc. are enjoying an unprecedented level of ROA in recent years. In our view, the rise in ROE is combined results of the cyclical upturn in the economy and the improvements in the corporate governance in Japan. 

Japan Entering a New Era of Capital Efficiency

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<figure class="editor-figure mceNonEditable"><img class="editor-image img-responsive" src="https://static-prod.smartkarma.com/images/media/000/049/770/original/CP%20header.jpg?1523938797" data-smartkarma-image-id="49770"></figure><p>We have made a case that EM FX is kicking off a cycle that will lead a USD key low in Asia stemming largely from the leading cycle in the TRY breakout and the secondary trigger breakout in BRL. We are seeing more signs of a reluctance for the USD trade low in in Asian FX and are gradually increasing USD long exposure which will play a role in the next equity decline in Asia.</p><p><strong>EM FX leading </strong></p><div style="text-align: left;">To view click on this link: <strong><a href="https://www.screencast.com/t/lfUq75NsE" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://www.screencast.com/t/lfUq75NsE&amp;source=gmail&amp;ust=1524024619361000&amp;usg=AFQjCNGlIcjXS-97LJt3X7JzCjDcjpZQxw">https://www.screencast.com/t/lfUq75NsE</a>  </strong>15:11 min.</div><div style="text-align: left;">
<figure class="editor-figure mceNonEditable"><img class="editor-image img-responsive" src="https://static-prod.smartkarma.com/images/media/000/049/772/original/CPG%20INSERT.png?1523938838" data-smartkarma-image-id="49772"></figure><div class="content-caption">FX webcast</div>
<p><strong>DXY </strong>– DXY 89 is the…</p>
</div>

We have made a case that EM FX is kicking off a cycle that will lead a USD key low in Asia stemming largely from the leading cycle in the TRY breakout and the secondary trigger breakout in BRL. We are seeing more signs of a reluctance for the USD trade low in in Asian FX and are gradually increasing USD long exposure which will play a role in the next equity decline in Asia.EM FX leading To view click on this link: https://www.screencast.com/t/lfUq75NsE  15:11 min.
FX webcast
DXY – DXY 89 is the…


EM FX Leading a Broader USD Cycle Low in Asia

<div class="content-highlight"><p>The opposition parties seem to be losing momentum in pursuing the responsibility of Prime Minister Abe for the cronyism scandal. However, we are seeing signs of erosion in the support for PM Abe within his party. Ultimately, the polling results would set the course, but we think it is more likely that the ruling party would decide against letting PM Abe continue as their leader when his term expires this September.  </p></div><h2>The testimony was a success for Prime Minister Abe</h2><p>The parliamentary testimony on…</p>

The opposition parties seem to be losing momentum in pursuing the responsibility of Prime Minister Abe for the cronyism scandal. However, we are seeing signs of erosion in the support for PM Abe within his party. Ultimately, the polling results would set the course, but we think it is more likely that the ruling party would decide against letting PM Abe continue as their leader when his term expires this September.  The testimony was a success for Prime Minister AbeThe parliamentary testimony on…

PM Abe Facing Erosion of Support from His Party

Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

<p>Our guide to this week’s global macro risk events and trading opportunities.</p><ul class=""><li><strong>This week in trade ideas</strong>: Short NKY and USD-JPY. Still short US tech vs SPX. Contrarian long Russia equities vs EM. Stay long Saudi equities post-FTSE Russell index decision. No longer positioned for RMB basket-depreciation near-term. Take profit on short Philippine and Indian equities, long Malaysia. Close AUD-NZD.</li><li><strong>Monday</strong>: New Zealand trade, Fed Mester, EU-UK discuss Irish border, Egypt elections (Mon-Wed)</li><li><strong>Tuesday</strong>: Sweden economic tendency, $35bn 5yr UST auction, Hungary MNB, Argentina BCRA, Fed Bostic</li><li><strong>Wednesday</strong>: Germany consumer confidence, $29bn 7yr UST auction, Thailand BOT, South Africa SARB, FTSE Russell index decision for Saudi Arabia</li><li><strong>Thursday</strong>: Japan retail sales, Germany CPI, Canada GDP, US personal income/spending, Turkey GDP, Czech CNB, Egypt CBE</li><li><strong>Friday</strong>: Japan jobs/Tokyo CPI/IP, Turkey trade, Holidays (US, Singapore, HK, EU, UK, among others)</li><li><strong>Saturday</strong>: China NBS PMI</li><li><strong>Corporate earnings</strong>: Agribank, Sinopec, China Vanke, China Evergrand (Mon), ICBC, CCB, Kweichow Moutai, Lululemon (Tue), Walgreens Boots, Monsanto, Citic, China Everbright (Wed), Bank of China, Bank of Communications, SAIC Motor, CNOOC, BOC HK (Thu)</li><li><strong>Market holidays</strong>: US, Singapore, HK, Australia, NZ, EU, UK, Canada, Mexico, Brazil (Good Friday)</li></ul>

Our guide to this week’s global macro risk events and trading opportunities.This week in trade ideas: Short NKY and USD-JPY. Still short US tech vs SPX. Contrarian long Russia equities vs EM. Stay long Saudi equities post-FTSE Russell index decision. No longer positioned for RMB basket-depreciation near-term. Take profit on short Philippine and Indian equities, long Malaysia. Close AUD-NZD.Monday: New Zealand trade, Fed Mester, EU-UK discuss Irish border, Egypt elections (Mon-Wed)Tuesday: Sweden economic tendency, $35bn 5yr UST auction, Hungary MNB, Argentina BCRA, Fed BosticWednesday: Germany consumer confidence, $29bn 7yr UST auction, Thailand BOT, South Africa SARB, FTSE Russell index decision for Saudi ArabiaThursday: Japan retail sales, Germany CPI, Canada GDP, US personal income/spending, Turkey GDP, Czech CNB, Egypt CBEFriday: Japan jobs/Tokyo CPI/IP, Turkey trade, Holidays (US, Singapore, HK, EU, UK, among others)Saturday: China NBS PMICorporate earnings: Agribank, Sinopec, China Vanke, China Evergrand (Mon), ICBC, CCB, Kweichow Moutai, Lululemon (Tue), Walgreens Boots, Monsanto, Citic, China Everbright (Wed), Bank of China, Bank of Communications, SAIC Motor, CNOOC, BOC HK (Thu)Market holidays: US, Singapore, HK, Australia, NZ, EU, UK, Canada, Mexico, Brazil (Good Friday)

Week Ahead in Global Macro: US Tech and Trade Risks, China PMI, FTSE on Saudi, SARB, Good Friday

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

<p><strong>US Dollar, Euro, Sterling, Yen</strong> crosses - summary of conclusions: </p><ul><li>The <strong>Dollar Index</strong> has achieved almost all we expected of it on the downside, but there is still conflict in the signals. It has produced the <em>minimum</em> pattern needed to end the 5-wave decline from the 2017 high, and its initial rally off the recent low was a 5-waver. However, that is not automatically bullish, and there was almost no bullish divergence in the daily indicators at the low, although the medium-term indicators have…</li></ul>

US Dollar, Euro, Sterling, Yen crosses - summary of conclusions: The Dollar Index has achieved almost all we expected of it on the downside, but there is still conflict in the signals. It has produced the minimum pattern needed to end the 5-wave decline from the 2017 high, and its initial rally off the recent low was a 5-waver. However, that is not automatically bullish, and there was almost no bullish divergence in the daily indicators at the low, although the medium-term indicators have…

Japan

The Japanese yen is the official currency of Japan. 

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Japan Entering a New Era of Capital Efficiency

For years, ROE among Japanese companies languished in low single digits. No more. The average ROE rose to 9.1% in the fiscal year 2017, clearing...

Takuji Okubo

EM FX Leading a Broader USD Cycle Low in Asia

We have made a case that EM FX is kicking off a cycle that will lead a USD key low in Asia stemming largely from the leading cycle in the TRY...

Thomas Schroeder

PM Abe Facing Erosion of Support from His Party

The opposition parties seem to be losing momentum in pursuing the responsibility of Prime Minister Abe for the cronyism scandal. However, we are...

Takuji Okubo

Week Ahead in Global Macro: US Tech and Trade Risks, China PMI, FTSE on Saudi, SARB, Good Friday

Our guide to this week’s global macro risk events and trading opportunities. This week in trade ideas: Short NKY and USD-JPY. Still short US tech...

Virgil Fernandez Esguerra

US Dollar: Monthly Currency Focus

US Dollar, Euro, Sterling, Yen crosses - summary of conclusions: The Dollar Index has achieved almost all we expected of it on the downside, but...

Peter Beuttell

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