The BoJ's interest rate decision is due tomorrow. Anyone who remembers August 24 knows that this can also lead to increased volatility here and in the USA.
The consensus among market participants is that key interest rates will be raised from 0.25% to 0.75%. This may sound relaxed against the backdrop of European and US key interest rates, but it could have a direct impact on our portfolio.
- Most of the Japanese companies in our portfolios are heavily dependent on exports ($6367 (+2.15%)
$8001 (-0.23%)
$SUMICHEM
$8002 (-0.68%) ...). An appreciation of the yen therefore has a direct impact on company results, the outlook and thus possibly on share performance. - For decades, carry trades took place due to the low level of interest rates. In other words, cheap money was borrowed in Japan and invested primarily in US stocks or Bitcoin $BTC (-0.29%) were invested. Due to the lower interest rate spread, many carry trades will no longer be worthwhile and will be settled. This leads to less investable money and can therefore lead to lower prices.
Basically, I believe that the actual interest rate hike is already priced into both prices and carry trades and will therefore only lead to low volatility.
As always, the outlook for the continuation of interest rate policy is much more decisive. If a tighter interest rate policy with several rate hikes is announced next year, I actually expect losses of >10%, especially for Japanese stocks.
I will try to pick up Itochu $8001 (-0.23%) during the day on Friday.
