A Fabulous Overview On The Controversial Economic Developments Happening In Japan


Research and portfolio group Waverly Advisors is out with a new presentation on Japanese markets.

The takeaway: it’s time to short everything denominated in Yen — as well as the Yen itself.

Waverly says the country’s central bank is poised for a more dovish leadership change.

They also see debt rising ever higher.

Waverly's title clues us in to an ominous forecast.

Japan's Liberal Democratic Party, led by Shinzo Abe, will almost certainly win upcoming elections. That means hawkishness on foreign policy and dovishness for home finances.

In theory, more easing should inflate stocks. But there are strong headwinds to this.

Debt dependency is set to explode.

Equity returns have never been that great to begin with.

Japanese stocks tend to be held by large corporations who never sell.

Contrary to popular belief, weaker currencies do not always translate into higher equity returns.

The Nikkei's trading range has long been a basket case for investors.

In sum: a highly unconvincing bullish case, to say the least.

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