Fixed Income Investment Outlook – Q2 2022

Reading Time: 2 minutes

The Japanese yen has Never Been Cheaper

 

 

  • Against the US dollar, the Japanese yen is at a 24-year low
  • Over the same period, the domestic purchasing power of the dollar has almost halved, whilst that of the yen has barely moved
  • Consequently, the yen is extremely undervalued according to our PPP valuations (see chart)
  • Short term weakness has been driven by monetary policy divergence
  • But in order to maintain relative purchasing power, the yen should be much stronger

 


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It should not be assumed that investments made in the future will be profitable or will equal the performance of any security referenced in this paper. Past performance is not a guarantee of future results. An investment involves the risk of loss. The investment return and value of investments will fluctuate.

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All information is as of June 30, 2022 unless otherwise noted.

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