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☆ Here's where to invest $1 million, according to the pros
▼ + stars: | 2024-09-23 | by ( Weizhen Tan | ) www.cnbc.com time to read: +4 min

If you had as much as a spare $1 million to invest right now, what should you buy? Balanced-to-medium risk profile With as much as $1 million to invest with, investors can buy individual securities instead of being restricted to funds, said David Dietze, managing principal and senior portfolio strategist at Peapack Private Wealth Management. "A much smaller amount leaves an investor forced to invest in funds to get adequate diversification. With one million, one could say invest $20K in fifty different stocks and be well diversified," he said. More aggressive risk profile Gambles says that taking on a more aggressive stance would mean an "all in commitment" on the themes he expects will perform, and removing any hedges against those trades.

Persons: Paul Gambles, David Dietze, Dietze, Bristol Myers, Gambles Organizations: U.S . Federal Reserve, CNBC Pro, Family, Yen, Wealth Management, Bristol, BHP Group, Hershey, BHP Locations: China, Australian

☆ Bank of Japan set to reduce JGB purchases, stands pat on interest rate
▼ + stars: | 2024-06-14 | by ( Lim Hui Jie | ) www.cnbc.com time to read: +1 min

The Bank of Japan is largely expected to hold interest rates steady at the end of its 2-day meeting ending June 14, 2024. The Bank of Japan kept its benchmark interest rate unchanged on Friday, but indicated it's considering the reduction of its purchase of Japanese government bonds. The central bank left short-term rates unchanged at between 0% to 0.1% at the end of its two-day policy meeting, as widely expected. But notably, the bank said in its statement it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled for July 30 and 31. Purchases of JGBs, commercial paper and corporate bonds will also continue as decided in the March monetary policy meeting.

Persons: Nakamura Toyoaki, Toyoaki, JGB Organizations: Bank of Japan, The Bank of Japan, U.S ., Nikkei Locations: Tokyo

☆ Dollar a tad softer as markets wait for Fed
▼ + stars: | 2024-04-29 | by ( ) www.cnbc.com time to read: +2 min

Japan's yen was at 158.05 per dollar, up nearly 0.2% in quiet trading with Tokyo markets closed for the first of the country's Golden Week holidays. "The bar is pretty high for a sustained hawkish surprise, which would in turn lift yields," he said, referring to the Fed. "The BOJ disappointment might be transcribed onto the FOMC insofar that they may be more undecided than decidedly hawkish." The Fed is seen holding its benchmark interest rate steady at 5.25%-to-5.5% at the April 30-May 1 meeting. Markets are also on guard for any intervention by Japanese authorities to contain the yen's nearly 11% fall this year.

Persons: Jerome Powell, Vishnu Varathan, Sterling Organizations: U.S, Bank of, Mizuho Bank, Market Committee Locations: Japan, Tokyo, Bank of Japan, Asia, Singapore

The BOJ will now look to utilize its short-term interest rate as its primary policy tool. It will employ an interest rate of 0.1% to current account balances held by financial institutions at the central bank from March 21, while encouraging the uncollateralized overnight call rate (another interest rate used as a policy lever by the bank) to remain at around 0 to 0.1% — effectively raising interest rates from -0.1% previously. It would resort to "nimble responses" in the form of increased Japan government bond purchases and fixed-rate purchases of JGBs, among other things, if there is a rapid rise in long-term interest rates. Japanese investors have looked elsewhere for better returns given years of artificially depressed interest rates in their home market. The Fed is due to announce its own interest rate decision on Wednesday.

Persons: Japan Alexander Spatari, Kazuo Ueda, Rob Carnell, BOJ, Ueda, Michael Brown, —, JGBs, Vishnu Varathan, Hayden Briscoe, Briscoe Organizations: Japan's, Japan Inc, Asia, ING, CNBC, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Mizuho Financial Group, Bank of America, Barclays, U.S . Federal, UBS Asset Management Locations: Dotonbori, Japan, Japan's, U.S, Mizuho's, Asia

☆ Goldman says Bank of Japan's policy tweak is good news for banks — and names top picks in the sector
▼ + stars: | 2023-11-07 | by ( Amala Balakrishner | ) www.cnbc.com time to read: +3 min

She noted that a flexible YCC "may be conducive to a more controlled yield rise since there's no more line in the sand to go against." Elsewhere, Kuroda wrote in notes to CNBC that Japanese banks "remain in focus as a beneficiary" of BOJ's interest rate normalization. A more flexible interest rate on BOJ operations may allow for a controlled rise in long-term yields, Kuroda said in notes to CNBC. "This might make it easier for banks to buy or reinvest JGB portfolio at higher yields." Japanese bank stock picks Goldman Sachs continues to name conviction list stock Mitsubishi UFJ Financial Group (MUFG) and Mizuho as its top picks from the Japanese banking sector.

Persons: Goldman Sachs, BOJ, Makoto Kuroda, CNBC's, Kuroda, Yuka Azami, MUFG, Goldman, CNBC's Naman Tandon, Lim Hui Jie Organizations: CNBC, Mitsubishi UFJ Financial, Mizuho, Tokyo Stock

Bank of Japan Governor Kazuo Ueda attends a press conference after its policy meeting in Tokyo, Japan October 31, 2023, in this photo taken by Kyodo. In addition, interest rate changes were asymmetric — Fed rate hikes following stock market recoveries were usually muted compared with the initial cuts. This was an explicit, open-ended policy to hold the currency at a set level and flood the Swiss economy and markets with oceans of liquidity, but essentially still a central bank put. As Marc Chandler at Bannockburn Global Forex points out, it is financial stability that is ultimately - and rightly - at the heart of the so-called central bank put. "There is a perception or myth that has built up around the central bank put.

Persons: Kazuo Ueda, Alan Greenspan, Louis, William Poole, Greenspan, Steven Englander, Marc Chandler, Chandler, Jonathan Oatis Organizations: Japan, Kyodo, REUTERS Acquire, Rights, Bank of Japan, Federal Reserve, Louis Fed, Swiss National Bank, Standard Chartered, National Bureau of Economic Research, Swiss, Reuters, Bannockburn Global, Thomson Locations: Tokyo, Japan, Rights ORLANDO , Florida, New York, Switzerland, Swiss, Bannockburn

☆ BOJ chooses slow path out of zero-rate limbo
▼ + stars: | 2023-10-31 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +4 min

REUTERS/Susana Vera Acquire Licensing RightsHONG KONG, Oct 31 (Reuters Breakingviews) - The Bank of Japan (8301.T) is taking the long road out of zero-interest rate limbo. On the face of it, BOJ Governor Kazuo Ueda and his colleagues made few policy changes at their latest meeting. The short-term interest rate remains negative, while the official yield target for 10-year Japanese government bonds is unchanged at 0%. However, the real challenge for Ueda is when to end the era of negative short-term interest rates. The BOJ’s nine-member board maintained its target for short-term interest rates of -0.1%.

Persons: Kazuo Ueda, Susana Vera, Haruhiko Kuroda, Ueda, “, Antony Currie, Thomas Shum Organizations: Japan, International Monetary Fund, World Bank, REUTERS, Reuters, Bank of Japan, U.S, Thomson Locations: Marrakech, Morocco, HONG KONG, Japan

☆ Macro hedge funds turn bearish on equities - Barclays
▼ + stars: | 2023-10-31 | by ( ) www.reuters.com time to read: +1 min

A trader works at his post on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 23, 2023. The bank's U.S. equity strategy team wrote that global macro hedge funds are likely seeing equities repricing lower as the 10-year Treasury yields has spiked to around 5%. CTAs, which were already bearish on equities, have added to their positions. "CTAs have built sizeable shorts in global equities, and have room to add further," Barclays said, adding the trend-following investors have become short U.S. technology stocks. The analysts noted CTAs are bearish on most assets, including U.S. Treasuries, JGBs and Bunds, but they are long oil.

Persons: Brendan McDermid, Carolina Mandl, Jonathan Oatis Organizations: New York Stock Exchange, REUTERS, Barclays, Carolina, Thomson Locations: New York City, U.S, New York

Passersby walk past an electric monitor displaying the Japanese yen exchange rate against the U.S. dollar outside a brokerage in Tokyo, Japan October 4, 2023. REUTERS/Issei Kato/File photo Acquire Licensing RightsOct 30 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Asian markets on Monday will also give their initial reaction to news over the weekend of an expected U.S.-Sino summit between presidents Joe Biden and Xi Jinping next month. But the MSCI emerging market index and Asia ex-Japan index's falls of around 0.6% last week were notably shallower than the MSCI Work index's 2% slide. China's recent economic and market signals, at least, are brightening a little.

Persons: Issei Kato, Jamie McGeever, Joe Biden, Xi Jinping, Japan index's, Bond, JGBs, Diane Craft Organizations: U.S, REUTERS, Tech, Investors, Tuesday's Bank of Japan, Bank of, Thomson, Reuters Locations: Tokyo, Japan, Malaysia, Asia, South Korea, Indonesia, Vietnam, Taiwan, Hong Kong, U.S, Australia, Bank of Japan, Germany

☆ Frail yen grazes 150 again as anxiety mounts over Middle East
▼ + stars: | 2023-10-23 | by ( Vidya Ranganathan | ) www.reuters.com time to read: +4 min

Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. U.S. Treasuries were subdued as investors hunkered down for a European Central Bank meeting and U.S. GDP data later in the week. "Potentially there are two camps out fighting around 150, so that's why dollar-yen doesn't move from here," Yamamoto said. While there was some speculation the BOJ might once again tweak its yield-curve policy band at a scheduled policy review next week, the BOJ had also shown it will not let domestic yields rise sharply, he said. Yields dipped on Friday after the BOJ announced more loans to encourage financial institutions to buy JGBs.

Persons: Florence Lo, Jerome Powell, Masafumi Yamamoto, Yamamoto, Sean Callow, Shri Navaratnam, Simon Cameron, Moore Organizations: U.S, REUTERS, Rights, Hamas, United, European Central Bank, Bank of Japan, Mizuho Securities, Westpac, Brent, ECB, Reuters, Thomson Locations: Rights SINGAPORE, Asia, Gaza, United States, U.S, Tokyo, East

☆ Asian shares pare losses on China data, Mid East risk lifts oil
▼ + stars: | 2023-10-18 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

Global bond markets also still nursed heavy losses as strong U.S. retail data argued for a punishingly long stretch of high rates. The outlook for the world economy did take a small turn for the better as China reported annual economic growth of 4.9% in the third quarter, beating forecasts for 4.4%. Retail sales and industrial output for September also surprised on the upside, suggesting activity had been gaining momentum. "A major spike in volatility and a downgrade of the global economic growth outlook is possible." Oil prices swung higher once more, driven by concerns over the Middle East and data showing a fall in crude stocks.

Persons: Issei Kato, Bonds, pare, Joe Biden's, Stocks, scurrying, Jerome Powell, Brent, Wayne Cole, Shri Navaratnam, Sam Holmes Organizations: REUTERS, Nikkei, SYDNEY, CBA, Japan's Nikkei, Nasdaq, Tech, Nvidia, Biden, Netflix, JPMorgan, Atlanta Fed, Federal Reserve, Bank of Japan, ., Thomson Locations: Tokyo, Japan, China, Gaza, Iran, Israel, Asia, Pacific

☆ Morning Bid: China data beat overshadowed by Mideast foreboding
▼ + stars: | 2023-10-18 | by ( ) www.reuters.com time to read: +3 min

REUTERS/Lisi Niesner/File Photo Acquire Licensing RightsA look at the day ahead in European and global markets from Wayne Cole. The latest batch of economic data from China surprised by beating forecasts, but was unfortunately overshadowed by fears of a widening conflict in the Middle East following the Gaza hospital blast. Perhaps more importantly retail sales and industrial output for September topped estimates, which might mean Beijing's stimulus steps were finally bearing fruit after months of disappointment. The implications for inflation were another headache for bonds, which were still smarting from Tuesday's red-hot U.S. retail sales report. JPMorgan responded by ramping up its forecast for U.S. third quarter GDP growth to an annualised 4.3%, implying nominal growth of more than 7%.

Persons: Lisi Niesner, Wayne Cole, Joe Biden's, Brent, ramping, Fed's Waller, Williams, Bowman, Harker, Jacqueline Wong Organizations: REUTERS, JPMorgan, U.S, Bank of Japan, Netflix, Norges Bank, EU, Fed, Thomson Locations: Israeli, Lebanon, Israel, Wayne, China, Gaza, millstone, Iran, Hormuz, Asia, Cook

[1/2] A man walks past a signboard of Mitsubishi UFJ Financial Group and MUFG Bank at its headquarters in Tokyo, Japan April 3, 2018. Globally bonds have been heavily sold for weeks - prompting the Bank of Japan to step in to steady the JGB market - as investors reckon on interest rates around the world staying elevated. The lingering concerns, coupled with the prospect of further central bank policy tweaks, are likely to keep investors on guard against buying JGBs," he said. Even if the BOJ raises short-term rates, it will probably have to maintain the YCC framework to avoid any abrupt rise in long-term interest rates, Seki said. The BOJ will have no choice but to engage with long-term rates "because the complete removal of a target band could cause volatility in yield curve and sharp spikes in long-term interest rates," he said.

Persons: Toru Hanai, Hiroyuki Seki, Seki, Makiko Yamazaki, Ritsuko Shimizu, Leika Kihara, Muralikumar Organizations: Mitsubishi UFJ Financial, MUFG Bank, REUTERS, Rights, Bank of, Bank of Japan, Reuters, Thomson Locations: Tokyo, Japan, U.S

☆ BOJ discussed factors for exiting easy policy at Sept meeting; 10-yr JGBs falter
▼ + stars: | 2023-10-02 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

FILE PHOTO: Japanese national flag is hoisted atop the headquarters of Bank of Japan in Tokyo, Japan September 20, 2023. Under yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and the 10-year bond yield around zero. A Reuters poll in September forecast that the central bank will end its negative interest rate policy some time next year and YCC by end of 2024. “Even if the BOJ were to terminate its negative interest rate policy, this can be considered as continuation of monetary easing if real interest rates remain negative. But he has also said the BOJ will consider an exit when sustained, stable achievement of its price target is in sight.

Persons: Issei Kato, Kazuo Ueda’s, Governor Ueda, Ueda Organizations: Bank of Japan, REUTERS, Reuters, Bank Locations: TOKYO, Tokyo, Japan, YCC

But the benign reaction across markets to the BOJ's latest "yield curve control" tweak suggests BOJ Governor Kazuo Ueda may have timed this one just right. In those eight months global inflation has topped out and is now clearly falling, and major central banks are closer to "peak rates." Barclays analysts reckon the BOJ will scrap YCC in October, which would be "sufficiently justified" by Japan's strengthening inflation dynamics. BOJ GETS MARKET BUY-INWhenever the BOJ decides to start offloading its JGBs, there will be plenty of pent-up demand. But the early signs suggest investors believe the BOJ has timed it right and can, to coin a phrase, achieve its own "soft landing."

Persons: Issei Kato, Kazuo Ueda, Government Bond, Jamie McGeever, Paul Simao Organizations: Bank of Japan, REUTERS, Government, Reuters, HSBC, Barclays, International Monetary Fund, U.S . Federal, European Central Bank, Reserve Bank of Australia, Thomson Locations: Tokyo, Japan, ORLANDO, Florida

Over the two trading days since, the market has tried to second-guess the pace at which the BOJ wants yields to move, while the BOJ has run special bond-buying operations to cap yields. "There is only a very, very small possibility of a sudden or very steep rise in JGB yields, because too many people want to buy the bonds. The maximum yield investors demanded was 0.6%, just 10 basis points (bps) above the previous policy cap. The promise of an extra 10-20 bps of JGB yield means 10-year JGBs hedged from dollars into yen can yield upwards of 6%. As per BOJ data, lifers and pension funds held roughly 26% of a 1,132 trillion yen ($7.93 trillion) JGB market at the end of 2019.

Persons: It's, we've, Ales Koutny, Rong Ren Goh, BOJ, Tomoya Masanao, Masanao, Rae Wee, Tom Westbrook, Harry Robertson, Alun John, Vidya Ranganathan, Himani Sarkar Organizations: Bank of Japan, JGBs, Vanguard Asset Management, Eastspring Investments, Foreigners, U.S, Nippon Life, Asia Pacific, Thomson Locations: SINGAPORE, TOKYO, United States, Europe, Singapore, JGBs, Belgian, Japan, PIMCO, Sydney, London

☆ Yen rises amid reports the Bank of Japan may discuss 'tweaking' policy
▼ + stars: | 2023-07-28 | by ( Sumathi Bala | ) www.cnbc.com time to read: +1 min

The yen was hovering around the 139.13 mark against the U.S. dollar at about 11:25 a.m. Hong Kong/Singapore time. The Japanese yen rose on Friday morning in Asia, on the back of a report that the Bank of Japan could potentially "discuss tweaking" its yield curve control policy at today's policy meeting. Under its yield curve control policy, the central bank targets short-term interest rates at -0.1% and the 10-year government bond yield at 0.5% above or below zero. With inflation having exceeded the BOJ's 2% target, concerns are rising that Japan's relatively low interest rates have made the yen less attractive and vulnerable to selling. Central banks around the world have raised rates aggressively to rein in on inflation, but Japan has continued to maintain an ultra-loose monetary policy and kept rates low.

Persons: — CNBC's Lim Hui Jie Organizations: Nikkei, U.S, Bank of Japan Locations: Hong Kong, Singapore, Asia, Japan

☆ Morning Bid: Bank of Japan sets the stage for higher yields
▼ + stars: | 2023-07-28 | by ( ) www.reuters.com time to read: +3 min

[1/2] A Japanese flag flutters on the Bank of Japan building in Tokyo, Japan, March 15, 2016. The BOJ maintained its guidance allowing the 10-year yield to move 0.5% around the 0% target, but said those would be "references" rather than "rigid limits". There's weakness all around in stock markets, with MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) down, along with Japan's Nikkei (.N225). The Dow Jones Industrial Average (.DJI) fell 0.67% to snap its longest winning streak since 1987. Second-quarter GDP estimates for Spain, France and Germany should show modestly expanding and yet struggling economies, if latest purchasing manager indexes are any indication.

Persons: Toru Hanai, Vidya Ranganathan, Jerome Powell, Christine Lagarde, there's, Edmund Klamann Organizations: Bank of Japan, REUTERS, ECB, U.S . Commerce Department, Japan's Nikkei, Dow Jones, The U.S . Commerce Department, Reuters Graphics Reuters, AstraZeneca, BASF, Exxon Mobil, Thomson Locations: Tokyo, Japan, Vidya, United States, U.S, Asia, Pacific, Spain, France, Germany, The

☆ Bank of Japan pledges to guide yield curve control with 'greater flexibility'
▼ + stars: | 2023-07-28 | by ( Clement Tan | ) www.cnbc.com time to read: +1 min

Japan's central bank on Friday pledged greater flexibility in its target range for 10-year Japanese government bond yields, while keeping its ultra loose interest rate intact and revising core consumer inflation forecast upward for the current fiscal year. In a policy statement, the Bank of Japan said it will retain the 50 basis point limit on 10-year Japanese government bond yields either side of its 0% target. It will also offer to purchase 10-year JGBs at 1% every business day through fixed-rate operations, unless no bids are submitted. But the BOJ held its short-term interest rate target at -0.1% after a two-day meeting. However, the central bank has said inflation will slow toward the end of this year — a view that's shared by the Japanese government.

Persons: Kazuo Ueda Organizations: Bank of Japan Locations: Tokyo's Shinjuku, Japan's

☆ The Bank of Japan just shocked markets with a policy tweak — here's why it matters
▼ + stars: | 2023-07-28 | by ( Silvia Amaro | ) www.cnbc.com time to read: +5 min

Kazuo Ueda, governor of the Bank of Japan (BOJ). Bloomberg | Bloomberg | Getty ImagesThe Bank of Japan announced Friday "greater flexibility" in its monetary policy — surprising global financial markets. The central bank loosened its yield curve control — or YCC — in an unexpected move with wide-ranging ramifications. When asked if the central bank had shifted from dovish to neutral, he said: "That's not the case. MUFG said that Friday's "flexibility" tweak shows the central bank is not yet ready to end this policy measure.

Persons: Kazuo Ueda, Shigeto Nagai, CNBC's, —, Duncan Wrigley, MUFG, Governor Ueda, Michael Metcalfe, Metcalfe Organizations: Bank of Japan, Bloomberg, Getty, of Japan, Nasdaq, Oxford Economics, disinflation, Capital Economics, U.S, U.S . Federal, Bank, Pantheon, Street Global Locations: Europe, Japan, U.S ., China, dovish

☆ Morning Bid: Bank of Japan excites, Dow unlucky, Intel jumps
▼ + stars: | 2023-07-28 | by ( ) www.reuters.com time to read: +4 min

Specifically, the central bank said it would offer to buy 10-year JGBs at 1.0% in fixed-rate operations, instead of the previous rate of 0.5% - tolerating the wider band for bond market borrowing rates. With July core inflation in Tokyo falling back to a 10-month low, the need for tightening may be ebbing anyway. Friday's data is expected to show another drop in the Fed's favoured core PCE inflation gauge in June. For markets more broadly, Friday seems a little scattergun so far after a heavy week of macro policy and corporate news. U.S. Treasury yields fell back from two-week highs hit after the punchy U.S. economy readouts and central bank moves, with the 2-to-10 year yield curve steepening as recession fears abate.

Persons: Mike Dolan, Dow Jones bluechips, T Rowe Price, Nick Macfie Organizations: Bank of Japan, Dow, Nikkei, Federal Reserve, European Central Bank, Treasury, ECB, Intel, U.S, Exxon Mobil, Chevron, Proctor, Gamble, Colgate Palmolive, Franklin Resources, Newell Brands, Church, Dwight, Charter Communications, Dallas Fed, University of Michigan, Reuters, Thomson Locations: U.S, Wall St, Tokyo, Wall, Asia, Centene, Franklin

☆ Investors manoeuvre, warily, for long-shot BOJ policy move
▼ + stars: | 2023-07-27 | by ( Kevin Buckland | ) www.reuters.com time to read: +5 min

SLOWLY, STEADILYBOJ sources say the central bank is leaning towards keeping its yield control policy unchanged as policymakers wait for data to affirm wages and inflation will keep rising. The benchmark 10-year JGB yield also retreated to 0.445% from as high as 0.485%. "We don't short the JGB market. In part, it's an expensive thing to do - as you know, the Bank of Japan owns 110% of the 10-year JGB market," he said. "Nobody's calling for them to hike aggressively, just bringing some function back to the JGB market, allowing themselves to step away because the data has given them an opportunity to do so.

Persons: Jimmy Lim, Lim, Kazuo Ueda, Nigel Foo, Haruhiko Kuroda, Jim Leaviss, Leaviss, Michael Michaelides, Ales Koutny, James Athey, Athey, Kevin Buckland, Ankur Banerjee, Summer Zhen, Alun John, Divya Chowdhury, Harry Robertson, Vidya Ranganathan, Edmund Klamann Organizations: Bank of Japan, Management, ING, Investors, G Investments, Vanguard, Thomson Locations: TOKYO, Singapore, FSI, abrdn

That yen hoard has mostly been held as cash with the aim of ploughing into Japanese bonds when yields eventually turn higher. "We're all waiting for the end of YCC so we can buy JGBs," said a Japanese pension fund manager who requested anonymity as he is not authorized to speak to media. Japanese banks have ploughed money into overseas bonds, but insurance firms and pension funds have kept their powder dry. MARKETS WONT BLINKSuch is the positioning and inertia among long term Japanese investors that analysts expect markets to barely blink even if the BOJ plays for time this week. Lifers and pension funds say they have very little exposure to Japanese government bonds, so a surprise policy change won't hurt them either.

Persons: Androniki, Haruhiko Kuroda, Kazuo Ueda, Bart Wakabayashi, Hirofumi Suzuki, Suzuki, Kevin Buckland, Ankur Banerjee, Vidya Ranganathan Organizations: REUTERS, Bank of, Japan, Nippon Life Insurance, Sumitomo Life Insurance, Insurance, State, Thomson Locations: Japan, Tokyo, TOKYO, SINGAPORE, YCC, Singapore

That means portfolio managers are having to factor a stronger yen into global stock selection in way they have not for years, with some even anticipating mergers and acquisitions as the Japanese market revs up. "The trigger for the revaluation of the Japanese markets is higher rates and then a stronger yen. Japan's insurers and pension funds alone hold $1.84 trillion in foreign assets, Deutsche Bank calculates, greater than the size of South Korea's economy. "Policy normalisation could turn back the clock for Japanese investors," Deutsche Bank strategists said in a note. Carmignac, like many global investors, has maintained an underweight position towards Japanese stocks but, Leroux said, it was looking to raise this to neutral.

Dealers say BOJ efforts to make short selling more expensive have also worked and that investors are simply avoiding the market, rather than crowding into bets on yields rising. Nearly 90% of economists polled by Reuters said they expect no policy change. Ueda's most recent remarks have stressed the need to keep policy settings loose for now, without ruling out the possibility of future changes. On Sunday the Sankei newspaper reported the BOJ is considering a review of the impact of its policy settings, which could foreshadow changes. Nomura strategist Naka Matsuzawa said the path ahead would be a balance between getting a policy change done, and improving communication.

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