Markets · NY Daily Wire
Stronger yen could boost Tokyo AI, semiconductor, and real estate shares, according to JPMorgan Securities Japan strategists. This potential benefit arises from the yen's upward pressure on Japanese government bond yields, which could accelerate a recovery in Tokyo-listed AI and semiconductor shares. Real estate shares, which had been underperforming, are also expected to benefit similarly.
However, some sectors, including transportation, logistics, and automobile companies, may face negative earnings impacts due to the rising yen, as overseas revenue conversions shrink profits. JPMorgan's analysis contrasts with a more cautious global equities outlook for these sectors. Meanwhile, the yen's rally against the US dollar has raised concerns about unwinding crowded and leveraged positions, as traders may be forced to close these quickly when currency moves turn unfavorable.
The yen extended gains on September 9, supported by comments from US Treasury Secretary Scott Bessent, who challenged traders to counter efforts to strengthen Japan's currency. His remarks contributed to the yen's third consecutive day of gains, rising 0.4% to 153.40 per dollar. The yen had previously surged to a seven-month high on September 7, driven by expectations of faster Bank of Japan policy tightening and potential repatriation of funds by Japanese investors.
This week's key market events include the US inflation report on Friday, which could influence the Federal Reserve's interest rate decision, and the European Central Bank's meeting on Thursday, expected to raise eurozone interest rates. The yen's gains reflect broader monetary policy decisions from Japan, the US, and the euro zone.
Source: CNBC TV18
