In today’s briefing:
- Ohayo Japan | Stocks Rally as Powell Signals Rate Cuts
- GOLD: Rocks Or Stocks! Why Gold Continues to Outperform the S&P?
- Japan Morning Connection: Yamaha Motor, Rohm, Kawasaki Heavy
Ohayo Japan | Stocks Rally as Powell Signals Rate Cuts
- U.S. stocks surged on Friday, driven by a decline in Treasury yields after Federal Reserve Chair Jerome Powell signaled that rate cuts are imminent
- At the Jackson Hole Symposium, Powell stated that the “time has come” to adjust monetary policy, with the Fed open to a larger rate cut depending on incoming data
- Former Environment Minister Shinjiro Koizumi is the leading candidate to replace outgoing Prime Minister Fumio Kishida, according to a Nikkei poll
GOLD: Rocks Or Stocks! Why Gold Continues to Outperform the S&P?
- Gold’s price advance is idiosyncratic moving against historical norms of estimated inflation and real rates.
- Demand from large central banks is not currently a factor in price discovery as the PBOC has stopped buying. Gold’s safe-haven status has also declined since GFC in 2008/09.
- Easier monetary policy from the Fed and higher actual inflation continue to fuel lower real rates and provide substantial support for Gold’s price.
Japan Morning Connection: Yamaha Motor, Rohm, Kawasaki Heavy
- Yamaha Motor share sale by Toyota, Yamaha Corp and MS&AD may take time to clear, but the outlook for Yamaha Motor is improving. Expect Yamaha Corp strength on buyback expectations.
- Ueda signalling a slightly hawkish tone on Friday should be good for banks and utilities, but less good for exporters, tourism related and real estate.
- 6963 Rohm is starting to look interesting again with a few upcoming drivers which should help it rebound, including next weeks NKY225 rebalance announcement.
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