Asian stocks posted gains for the third consecutive month, boosted by positive COVID-19 vaccine developments around the world, the persistently weak US dollar (USD) and resilient Chinese economic data.
Despite major improvements over the last two decades, some critics will always doubt the progress of economic reform in Japan.
The US Treasury (UST) yield curve steepened in August. Yields initially traded in a tight range but experienced an abrupt rise mid-month, pushed higher by the uptick in the US July inflation readings and the US Treasury's outsized refunding announcement.
Internet companies have gone from strength to strength, dramatically outperforming the broader market year-to-date.
It does not seem that there are enough differences between Abenomics and the proposed economic policies of likely new Prime Minister Suga to justify the completely new portmanteau “Suganomics,” as a few analysts have suggested.
In late August the Nikkei made a full recovery from the "Corona shock" lows touched in March, amid initiatives by the government and the central bank.
Although it is fairly clear that Buffett’s investment is not just a passive one in that he intends to collaborate on business ventures with these trading companies, the fact that the world’s most famous investor has committed to such large sums has ramifications for both domestic and international perceptions about Japanese equities.
Many media reports are suggesting that Yoshihide Suga is leading the race to be Japan’s next prime minister, with a main question being whether he, without a large faction of his own, will just be a temporary placeholder for new leader.
It is attention-grabbing for some analysts and soothsayers to speculate on politics, but this is no casual matter.
Not many investors likely realize that Japan’s GDP performance in CY20, instead of being comparably poor, is actually about equal to that of the US, and well above the Eurozone’s.
Regional markets enjoyed another bout of strong performance in July. Global market sentiment remained buoyant due to optimism about the development of a vaccine for COVID-19; upbeat earnings of big technology companies; and assurance from the US Federal Reserve (Fed) that monetary policies would remain highly accommodative in the foreseeable future.
US Treasury (UST) yields traded in a very tight range, with the yield curve ending flatter in July.
The global economic recovery is continuing, although at a marginally slower pace; this is to be expected considering the impact of the second COVID-19 wave on the US sunbelt.
The Japanese equity market dropped in July, with the TOPIX (w/dividends) declining 4.02% on-month and the Nikkei 225 (w/dividends) falling 2.60%.