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THE WisdomTree BLOG

Jesper Koll / Macro Alerts, Japan 13 Oct 2017

Politics re-invented: Abe-Koike rivalry to bring supply-side reforms

Jesper Koll

Japan’s upcoming election is poised to usher in a new era of policy competition and political accountability. Structural reform in general, supply-side reform in particular, is poised to accelerate if, as we suspect, Tokyo Governor Koike catapults herself into the never-imagined-before position of being both in power and in opposition: in power because she will continue to be the ruling Governor of Tokyo; and in opposition because she will be the leader of the second largest party in parliament (assuming current opinion polls are correct in their predictions).

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Jesper Koll / Macro Alerts, Japan 03 Oct 2017

"Koikenomics" to re-energise "Abenomics"

Jesper Koll

A new force is gaining momentum in Japanese politics, led by Tokyo Governor Koike. Her new national party—Party of Hope—has just forged an election alliance with the opposition Democratic Party that could deliver as many as 120-180 out of 465 seats contested in the upcoming 22 October lower house election. Most importantly, "Koikenomics" is poised to re-energise the original pro-growth promise of "Abenomics". This is because Governor Koike has a long-standing record as a pro-business, pro-deregulation and pro-growth politician. 

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Jesper Koll / Macro Alerts, Japan 18 Sep 2017

Japan early election would delay BOJ exit further

Jesper Koll

Japanese media are speculating that PM Abe may call a snap election, possibly as early as October 22. Although the Prime Minister himself has, so far, not commented on these speculations—and it is at the Prime Minister's discretion to dissolve Parliament—my sources suggest a reasonable probability of an early election. If so, the key implication for markets would be an almost certain change in Japan's macro policy mix: the probability of taxes going up in 2019 would rise, which in turn raises the odds that the BOJ will have to do more for longer to ensure against the inevitable recession that has always followed consumption tax hikes.

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Jesper Koll / Macro Alerts, Japan 15 Sep 2017

Japan's tourism boom to bring growing political support for Yen depreciation

Jesper Koll
The boom in Japan’s inbound tourism is arguably the most tangible success story of “Abenomics”. Propelled by a steady stream of visa rule deregulation that started right in the first week of “Team Abe” moving into the Prime Ministers’ office in December 2012, inbound tourist arrivals have risen almost four-fold, from a 2012 monthly average of 697,000 to 2.6 million recently.1 In terms of money spent, since 2012 inbound tourist spending has accounted for the equivalent of 16% of the growth in consumer spending (excluding spending on rent).2 Although the absolute amount of tourist spending is still small at less than 1.5%3 of all consumption, its exceptional growth rate has had a most positive impact on domestic Japan, with especially high positive multipliers for regional economies.
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Jesper Koll / Macro Alerts, Japan 23 Aug 2017

Japan GDP—into the sweet spot

Jesper Koll

The April-June GDP report suggests that the Japanese economy has entered into a sweet spot, with growth accelerating and broadening into all components of domestic demand. While the 4% annualised GDP growth rate marks peak slingshot acceleration, the details of the report fully verify our thesis that Japan has entered a self-sustaining domestic demand-led up-cycle. Looking ahead towards 2018/19, we maintain our call for 2-2.5% real GDP growth (and 3-3.5% nominal GDP growth). For policy makers, the margin for error on Yen strength is eroding quickly. Specifically, the Japan sweet spot is marked by the following factors.

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Jesper Koll / Macro Alerts, Japan 07 Aug 2017

Team Abe 3.0: From a new cabinet towards new policies

Jesper Koll

Prime Minister Abe has presented his new cabinet. It is Abe's third leadership team since becoming Prime Minister in December 2012 and, like his previous teams, it is dominated by close and trusted allies. Moreover, the key positions did not change—Aso stays as Finance Minister, Seko as Economics Minister, and Suga as Chief Cabinet Spokesman. I expect this new cabinet will present a next supplementary budget of around Y5trn by October, focusing on added support for women, families and elderly.

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WisdomTree / Macro Alerts, FX / Currency Hedging, Japan 21 Jul 2017

Japan is leading dividend growth in international markets

WisdomTree

Once a year, WisdomTree conducts a rebalance of its dividend-weighted stock indices which adjusts positions based on changes in relative valuations. We measure these relative valuations by examining stock price movements versus fundamentals in international markets. The primary variable we are utilising in our broad-based index strategies is a company’s Dividend Stream®.

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Jesper Koll / Macro Alerts, Japan 29 Jun 2017

Japan's pro-growth agenda—how "Abe-ism" will re-ignite "Abenomics"

Jesper Koll

After a period of relative calm and no new initiatives, Japanese politics is poised to move back into global headlines in the coming months. This is because Prime Minister Abe has now presented a concrete timeline for reforming Japan’s constitution: the goal is to clear all the necessary Parliamentary hurdles by next summer (2018) so that the required national referendum can be called before end-2018. 

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Jesper Koll / Macro Alerts, Japan 13 Jun 2017

Homegrown strength: Japan's CAPEX cycle accelerates

Jesper Koll

Our structural bull-thesis for Japan calls for an endogenous, self-sustaining domestic demand up-cycle that is driven by Japan’s private sector. Demographics is the key force – for households, the structural shortage of labour will be pushing up incomes and improving job security, thus creating purchasing power for a “new middle class”; and for companies, the scarcity of human capital will force a shift towards more capital-intensive business models, i.e. a structural up-turn in business investment to improve the quality of the domestic capital stock. Also, M&A activity is poised to pick-up, with the scarcity of human capital forcing fundamental industrial reorganization. Clear-speakJapan’s productivity is ready for a positive super-cycle, which should translate into a structural up-turn in capital returns. 

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Jesper Koll / Japan, Macro Alerts 26 Apr 2017

Japan outlook—Show me the money

Jesper Koll

We maintain our view that Japanese risk assets—equities and real estate—are on track for a multiyear structural bull market. We believe 2017 is poised to bring a positive reversal of earnings momentum, with a pickup in top-line sales growth and a weaker currency capable of delivering 25% to 30% earnings growth (after last year’s drop of around 8%, calendar year). Given the relatively attractive valuation backdrop—TOPIX is trading at a modest discount to its 10-year averages on both trailing and forward P/E multiples—the rising visibility of earnings is likely to be the principal driver of Japan’s market performance. In contrast, we expect policy action and initiatives to be relatively less important market drivers for Japan, and the Bank of Japan (BOJ) to stay put and maintain its zero-rate 10-year bond yield target for the foreseeable future.

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Jesper Koll / Japan, Macro Alerts 13 Apr 2017

Pivot to the Pacific? Is it “risk on” Asia?

Jesper Koll

“Team Trump” demonstrated exemplary global economic leadership skills at last week’s Summit between President Donald Trump and China’s President Xi Jinping. Most importantly, both leaders agreed to a concrete agenda of dialogue and engagement: At the working level, both nations committed to a “100-day plan” to address bi-lateral trade issues, with progress overseen by the two Presidents directly; and at the top level, President Trump accepted President Xi’s invitation for a follow-on bi-lateral Summit in China sometime later this year. 

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Nizam Hamid / Macro Alerts, Japan, Equities 15 Mar 2017

Japanese exporters outperform as the Yen weakens

Nizam Hamid
Over the past six months the performance of Japanese equities has been driven by the sharp depreciation of the Yen versus the US Dollar. Having languished at levels close to Y100/USD as late as September 2016, the rapid appreciation of the US Dollar in a post-election environment saw the Yen weaken rapidly to over Y118 to the US Dollar and more recently hovering around Y1151.
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Jesper Koll / Macro Alerts, Japan, US 07 Feb 2017

Trump's America & Abe's Japan - Concrete Proposals

Jesper Koll
Japanese Prime Minister Shinzo Abe is poised to be the first global leader to present President Trump with a concrete policy proposal that is designed to shape and promote Trump’s “America First” agenda and, at the same time, to advance the US-Japan alliance. After meeting the then President-elect for the first time on November 17, Abe will meet Trump for the second time on 10-11 February and PM Abe appears very determined to impress the President by offering a concrete “deal” so that both countries can move from talk to action. If, as we suspect, the meeting goes well, the implications are poised to be positive for US-Japan economic and financial relations.
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Jesper Koll / Macro Alerts, Japan 10 Jan 2017

2017 Japan outlook: poised to perform

Jesper Koll
Japanese risk assets – equities and real estate – remain on track for a multi-year structural bull market. For the new year, we anticipate strong performance, driven by an upturn in the business cycle in general, the earnings cycle in particular. From a starting point of attractive valuations – TOPIX currently trades on a PE that is at a discount to both its own long-term average and to Wall Street multiples – we think Japanese equities could rise as much as 20%, i.e. TOPIX could climb back up to the 1,800 level last seen one decade ago, in 2007.
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Nizam Hamid

ETF Strategist

Nizam Hamid is an ETF Strategist for WisdomTree in Europe and has extensive experience in the European ETF market. Prior to this he was at C8 Investments, a systematic hedge fund, focusing on business development and quantitative strategies, before that he was a consultant at FTSE. From 2010 to 2012, he was Head of ETF Strategy and Deputy Head of Lyxor ETFs, at the time Europe’s second largest ETF issuer. Before joining Lyxor he was Head of Sales Strategy for the Europe and the Middle East at iShares in London. Prior to that, he was Global Head of ETFs, Portfolio and Index Strategy at Deutsche Bank from 1998 to 2008. He has also worked as a quantitative analyst in London and Tokyo for UBS, BZW and Bankers Trust / NatWest Markets. He holds a Degree in Economics from the University of Liverpool.

Viktor Nossek

Director of Research

Viktor, who has over 14 years’ experience in research, joined the firm from Renaissance Asset Managers where he was Head of Research. Viktor provides macro research on various themes covering equities, commodities and fixed income. His research for WisdomTree in Europe offers investment strategies for the current range of Smart Beta UCITS ETFs as well as the Boost range of short and leveraged Exchange Traded Notes. Viktor has previously worked as a Research Analyst at BlackRock and Thomson Financial. He started his career as an Equity Strategist at Commerzbank, after he completed a Masters in Economics from Maastricht University, in the Netherlands.

Nick Leung

Research Analyst

Nick Leung is a Research Analyst for WisdomTree in Europe. He is responsible for macroeconomic commentary and analysis, formulating investment strategies and trade ideas, as well as the maintenance of research collateral. Prior to joining in 2015, Nick was at Source, having completed his Master’s Degree at Imperial College London. During this time he was also involved in an ice-cream entrepreneurship project with Unilever. Nick holds a BA in Economics from the University of Nottingham.

Jose Poncela

Head of ETNs

Jose is Head of ETNs for WisdomTree in Europe and is responsible for managing WisdomTree’s Boost ETP platform and products. Prior to joining Boost/WisdomTree as a founding employee in 2012, Jose held positions as a structurer of strategic equity transactions at UBS and Nomura and qualified as an attorney working for a major US law firm. He holds an MBA from London Business School, Master in Laws from Fordham University in New York and legal and business degrees from Spanish universities.

Jesper Koll

WisdomTree's Head of Japan

Jesper Koll was appointed Chief Executive Officer of WisdomTree Japan on July 1, 2015. Over the past two decades Jesper has been consistently ranked as one of the top Japan strategists/economists, working as Chief Strategist and Head of Research for major U.S. investment banks J.P. Morgan and Merrill Lynch. His analysis and insights have earned him a position on several Japanese government advisory committees and Jesper is also one of the few non-Japanese members of the Keizai Doyukai, the Japan Association of Corporate Executives. He has written two books in Japanese, Towards a New Japanese Golden Age and The End of Heisei Deflation. After arriving in Japan in 1986 Jesper initially worked as an aide to a Member of Parliament. Jesper has a Masters degree from the School of Advanced and International Studies at Johns Hopkins University and was a research fellow at both Tokyo University and Kyoto University. He is a graduate of the Lester B. Pearson College of the Pacific.

Vania Pang

Capital Markets and Investment Solutions, Index and Quantitative Investment, ICBC Credit Suisse Asset Management (International) Company Limited

Ms. Pang is responsible for Capital Markets and Investment Solutions functions of the Index and Quantitative Investment department at the ICBC Credit Suisse Asset Management (International) Company Limited. From 2012 to 2016, Ms. Pang was the Vice President of Corporate Strategy and Development, Asia Coal Limited, where she led the strategic mergers and acquisitions, capital raising and investor relations management. Prior to that, she was the Associate Director, Business Development of Crown One Asset Management Company Limited, responsible for sales and marketing of fund products. Between 2007 and 2008, Ms. Pang was Assistant Manager, Public Distribution Hong Kong (Equity Derivatives and Private Investor Product Sales) of RBS, handling sales and marketing of listed equity derivatives products. Before joining RBS, she was an anchor and reporter with the Cable TV and Hong Kong Economic Journal.

Ms. Pang holds a M.Sc. in Development Finance from The University of Manchester, a M.A. in Journalism and a B.A. in Business Administration from The Chinese University of Hong Kong. 

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