Rich Advised to Buy Yen
World Economy

Rich Advised to Buy Yen

Money managers for Asia’s wealthy families are favoring the yen as it benefits from the turmoil in global financial markets.
Credit Suisse Group AG is advising its private-banking clients to buy the yen against the euro or South Korean won because the Japanese currency remains undervalued versus the dollar. Stamford Management Pte, which oversees $250 million for Asia’s rich, told clients the yen is set to strengthen to 110 against the greenback as soon as the end of this month. Singapore-based Stephen Diggle, who runs Vulpes Investment Management, plans to add to assets in Japan, Bloomberg reported.
The yen has outperformed all 31 other major currencies this year as Japan’s current-account surplus makes it attractive for investors seeking a haven. Bank of Japan Governor Haruhiko Kuroda’s Jan. 29 decision to adopt negative interest rates has failed to rein in the currency’s advance.
“All existing drivers still point to more yen strength,” said Koon How Heng, senior foreign-exchange strategist at Credit Suisse’s private banking and wealth management unit in Singapore. “The BOJ will need to do more to convince the markets about the effectiveness of its negative interest-rate policy.”

  15-Month High
The yen has appreciated more than 7% against the dollar this year to 112.16 in London Friday. It touched 110.99 Thursday, the strongest level since Oct. 31, 2014, the day the BOJ unexpectedly increased monetary stimulus for the second time during Kuroda’s tenure.
That’s a drawback for the central bank governor. He needs a weaker yen to help meet his target of boosting Japan’s inflation rate to 2% and keep exports competitive.
Stamford Management has briefed some of the families whose wealth it helps to manage about the firm’s “bullish stance” on the yen, said its chief executive officer, Jason Wang.

  BOJ ‘Ineffective’
“The adoption of negative interest rates reeks of desperation to me,” Wang said. “It’s akin to an admission by the BOJ that conventional monetary policy is ineffective in hitting their 2% inflation target.”
Credit Suisse predicts that the yen will strengthen to 115 against the euro in 12 months, from 126.91 Friday. Japan’s currency will gain to 11.10 won in 12 months, from 10.79, according to Heng.
In 2013, the yen tumbled 18% to 105.31 per dollar after Kuroda started quantitative and qualitative easing. It fell an additional 12% in 2014 to 119.78 helped by his surprise expansion of the program. The currency depreciated just 0.4% last year.
The yen’s weakness attracted tourists to Japan.

Short URL : http://goo.gl/uciBwf
  1. http://goo.gl/dwrpnt
  • http://goo.gl/Hb923y
  • http://goo.gl/crhEJK
  • http://goo.gl/ZaLmUN
  • http://goo.gl/nBm6KO

You can also read ...

Dow futures dropped more than 100 points in early trading, as traders returned from the long holiday  weekend to face fresh selling pressure for US stocks.
A six-day rebound in world stocks began to splutter on Tuesday...
ADB Forecasts India Growth at 7.3 Percent
The Asian Development Bank expects India’s growth to pick up...
Ghana Told to Cut High Agro Imports
The World Bank country director for Ghana, Henry Kerali, has...
Chinese ironworks are increasingly  using Australian ore, which has  a high iron content.
Global stock markets are down from their recent peaks and...
London-based Capital Economics expects the German economy to expand by 2.7% this year. This would be above the government’s  more conservative forecast of 2.4%.
The German economy is expected to improve in the next six...
Indonesia Criticizes Trump’s Protectionist Policies
Indonesia is foregoing billions of dollars on offer from...
Goldman Raises Red Flag Over US Gov’t Spending
US fiscal policy is headed for “uncharted territory.” That’s...
Venezuela’s Digital Currency Makes Debut
Venezuela has begun the process of introducing a new digital...