In this regular podcast series, MUFG subject matter experts within our business discuss the forces, indications, and policies that impact the U.S. economy and financial markets, and provide updates to their economic outlooks and forecasts for the weeks, months, and years ahead.
Have securities flows in and out of Japan reached an inflection point?
The Yen has weakened at the start of Japan’s new fiscal year while Yen rates and Yen cross currency basis have lacked momentum. The assassination attempt on Prime Minister Fumio Kishida over the weekend was shocking but did not elicit a major reaction in Japanese financial markets.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews recent price action and cross border security flows in March, as well as changes in market structure of the Tokyo market. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
Spring/summer turnover outlook and the outlook for the agency mortgage basis
In today’s episode, MUFG Head of Prepayment Modeling and Strategy, Glenn Schultz, provides our estimate for turnover across the 2023 spring/summer home selling season and the implication of our turnover outlook on relative value across the coupon stack. He also discusses the near, intermediate term outlook for the agency mortgage basis against the backdrop of the SVB and Signature Bank failures, along with FDIC liquidation of the securities portfolio.
Cross-border securities flows hit record levels ahead of BOJ Leadership Change
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido review JPY assets and securities flows in March and also looks ahead to triggers for April. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
Japanese markets and investors have weathered banking’s crisis of confidence well so far
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido evaluates the current state of the market after the outbreak of financial unease in Europe and the United States, and discusses US TIC and JSDA securities investment flow data. He also shares his views on spot USDJPY, Yen rates, and Yen basis.
Japanese markets react to a crisis of confidence in banks overseas as central banks outside of Japan continue to battle inflation
Japan’s markets have reacted to the banking issues in the U.S. and Europe in classic financial crisis/risk aversion fashion, with JPY rallying, JPY rates falling, and JPY basis widening. Japanese investors are passively watching the credit jitters in the U.S. and European banking sector, but they are being impacted considerably, given their sizeable stock overseas assets suggesting they will be monitoring global financial markets closely.
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his views regarding the credit concerns in the U.S. and European financial sector and his outlook for JPY cross assets and discusses the collaboration among six central banks for boost USD liquidity funding. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
FOMC’s New Balance of Risks: Inflation vs. Banking Issues
George Goncalves, MUFG Head of U.S. Macro Strategy, returns to discuss the new risks facing financial markets and how the Fed will handle the current inflation backdrop, while dealing with renewed bank issues. George reviews two of his recent reports, one focused on the financial system’s plumbing and liquidity dynamics and the other on his March FOMC preview. Listeners will recall that our house view has been that the Fed can raise rates as high as they like, but the criteria to stop matters more than where they settle at, while at the same time the more they hike, the likelihood that they break something in the markets or the economy or both where high.
We argue that the criteria to stop hiking is surfacing and that the hiking cycle may be close to being over. The tightening of financial conditions and credit standards post the recent bank failures, along with the long and variable lags of the prior hikes in the system (which are clearly leaving a dent on the financial markets) will likely result in the upcoming recession being ushered in sooner. This makes the upcoming FOMC meeting decision a much closer call as a result.
Kuroda’s last policy meeting is overshadowed by the collapse of Silicon Valley Bank
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido reviews the BoJ’s March Monetary Policy meeting, discusses his expectations regarding the government-BoJ joint statement as well as his outlook for BoJ monetary policy. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
Kuroda’s last policy meeting is likely a non-event, but what if it isn’t?
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido previews the March Bank of Japan Monetary Policy Board meeting and shares his outlook for JPY rates in March. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
What does an Ueda-led Bank of Japan mean for Japanese financial markets?
In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido shares his impressions of the BoJ leadership nominee hearings and considers the implications for JPY basis and JPY rates. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.
Markets are realizing that it’s too soon to claim victory on inflation
George Goncalves, MUFG Head of U.S. Macro Strategy, walks us through the worse than expected January CPI inflation report and the market’s reaction. In general, we view the repricing of rates as appropriate but continue to be perplexed on the easing that remains for broader financial conditions. With the month at the half-way point, and overall economic data painting a picture that inflationary pressures still linger, the upcoming FOMC minutes from the January meeting might shed light on what the committee is thinking. Net as we have said before, it’s not about what level the Fed gets to, but what are the conditions needed for them to stop hiking altogether.
For more information,
Head of Rates Sales, Americas
New York, NY
Head of U.S. Macro Strategy
New York, NY
Chief Japan Strategist
Head of Agency Mortgage Prepayment Modeling and Strategy
The podcast content above is being provided for educational and informational purposes only. The information and comments are not the views or opinions of MUFG Union Bank, its subsidiaries or affiliates. Please consult your attorney, accountant or tax or financial advisor with regard to your particular situation.