Unhedged Japanese equities temp the value conscious, once more, as a diversifier within equities.


The region is highly vulnerable to the presently very high oil and gas prices, as a large importer, and consequently has struggled under some of the same/similar thematics as European equities, as a function of the Russian invasion of Ukraine.

The BoJ is also charting a slightly more dovish path of monetary policy, relative to the more hawkish and globally synchronised central banks of the Fed, the ECB and RBA, to name a few. This is leading to a sizeable rate differential, which combines with the afore mentioned commodity differential to see the JPY at the weakest levels, relative to the AUD in many years (2014-2015 levels).


Now Japanese equities have typically performed well, operationally speaking, in their earnings recovery from COVID. The issue is really the aforementioned war/commodities/monetary divergence.


In a world in which commodities may be peaking, and Ukraine/Russian conflicting (potentially) moderating (as Russia drops the denazification requirements, and the EU membership requirements) gaining Yen exposure is potentially of interest.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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