easyJet jumps 14% as Apollo clinches $7.7 billion takeover with higher bid
Surprising to us, the scandal that that plagued Japanese Prime Minister Shinzo Abe seems to be blowing over. After reaching a height of around half of Japanese voters not supporting Abe's administration amid suspected cronyism and cover-up, polling numbers are now improving. This suggests that predictions over the end of 'Abenomics' might be premature.
The April 17th – 18th Summit in Japan will allow Abe to reinstate his control as Japan's longest post-war leader. US and Japan’s trade relationship will be key and there will be headline risks for JPY into the meeting. To highlight the sustainability, BoJ Governor Kuroda will begin his new second five-year term on 9th April.
Japan's economic conditions have improved significantly: in this first term year inflation remain below target. While the revised BoJ committee is dedicated to the 2% target, we suspect the economy and financial conditions must improve markedly to reach this lofty threshold. Clearly, the banks need to sustain its ultra-accommodative policy. Pricing in normalisation feels premature. The BoJ policy remains JPY negative. However, BoJ actions increasingly have a limited effect on the JPY, therefore the other side must have idiosyncratic driver to push the trade. We are focused on the much-maligned CAD for a long CADJPY trade.
CAD has performed well on the back of positive NAFTA negotiations. With Trump clearly focused on full-blown Sino-US trade war we suspect that Mexico and Canada will have an easier time.
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