In today’s briefing:
- Japan Post Insurance: Embedded Value Unlikely to Benefit from a Rate Increase
- Comment on Exchange Rate EUR/USD October 27, 2023
Japan Post Insurance: Embedded Value Unlikely to Benefit from a Rate Increase
- Japan Post Insurance might seem undervalued based on a regression analysis, but its relatively strong RoE was due to extraordinary gains.
- The company has a much larger portion of its investment securities being carried at cost on the balance sheet vs. its peer, Dai-ichi Life.
- Against the backdrop of Japan’s “higher for longer” theme, its embedded value growth could be under more pressure due to ANW’s m-t-m adjustments and very weak new business value.
Comment on Exchange Rate EUR/USD October 27, 2023
- During the period under consideration, i.e. September 27th – October 27th, 2023, the EUR/USD exchange rate fluctuated between 1.049 and 1.061 until October 22nd, 2023, but thereafter it followed an instantaneous daily uptrend on October 23 to finally secure the price of 1.0668.
- However, at the finish of October, the Euro notched a slight drop, but it was still trading higher than the levels at the end of September.
- According to Graph 1, during the first 18 trading days of the period under consideration, the pair showed a consolidation pattern mainly along the range of 1.05-1.0593 (except 2 sessions).
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