The Japanese economy has been floating through the abyss of zero interest rates for more than 20 years, unable to recover from the fallout related to its massive real estate bubble that popped in the early 1990s.
The Bank of Japan tried on two occassions to lift its key interest rate off the zero bound, only to have to reverse course and eventually drop rates into negative territory.
Trading Economics
Japan's foray into the zero interest rate environment may have seemed like a one-off years ago, but nowadays it's merely the new normal.
The European Central Bank and the Swiss National Bank are among those central banks who have dropped their key rate below zero, and as many as 10 countries have at least some debt trading with a negative yield.
Trading Economics
And while the Federal Reserve just raised its fed funds rate for the first time since 2006, there are rumblings that sooner or later the Fed will join the negative interest rate party.
So what can we learn from the "Japanification" of financial markets?
According to a recent Bank of America Merrill Lynch note, there are three simple lessons:
"Big, fat, volatile trading ranges will likely be the norm." Even though Japan's stock market suffered through a lost decade as a result of its deflationary bust, that didn't stop a rally of at least 20% occurring each year between 1990 and 2003. BAML says these rallies and fades are caused by the "3 P's" ...positioning, profits, and policy. Trading Economics
"Investors should 'own' deflation assets and 'rent' inflation assets." You should look to own deflationary plays like dollars, Treasurys and utilities while trading in and out of inflationary plays like commodities, gold and high yield. Trading Economics
Own "best of breed" stocks. Growth, quality and yield is the way to go. US investors should focus on defensive growth like staples while investors in Europe, Japan and China should move into high-dividend yield names. BAML's advice, "Buy what you trust."Trading Economics
Microsoft warns of 'active attacks' on its government and business server tech, with one cybersecurity expert claiming that they should 'assume that you have been compromised'
Настройки GameHub и Winlator для игры в Prey (2017) на Android
Bungie promises to fix Destiny 2's new metroid-style morph ball as it makes players sick and glitches out on ultrawide monitors
The dairy industry would like Gen Z to drink more milk, so they made a Fortnite diner tycoon game
25 июля пилотажная группа "Звезда" пролетит над пробками на шоссе под Москвой
Зарядки для электромобилей «Энергия Москвы» станут платными
Москвичей предупредили о задержках наземного транспорта из-за ливня
Рискнул на 100 тысяч рублей: инженер из Смоленска купил более 1,7 тысячи лотерейных билетов и выиграл автомобиль от «Национальной Лотереи» и РОЛЬФ на VK Fest