Investing

The Bank of Japan unexpectedly raised interest rates, and for those who did expect it, the increase was larger than expected. And so “all hell broke loose”.

The carry trade is a well-known currency trading strategy that has gained huge popularity among investors and traders in recent years.

Despite global securities markets enjoying a robust first half of 2024 and various investment categories capturing the interest of European investors, some segments failed to impress. Which asset classes, investment styles, and regions fell out of favor with investors?

Even the staunchest opponents of easing U.S. interest rate policy are now conceding. Among them is Torsten Slok, chief economist of private equity fund Apollo Global Management and a fervent supporter of the zero-cut stance.

Ritesh Jain, former chief investment officer for BNP Parisbas and Tata and founder at Pinetree Macro, spoke to Investment Officer about Monday’s market crash and highlighted the critical role of BOJ policies

Few stocks remain untouched in a market correction. An attempt by the editorial team to find out what asset managers are buying during the dip immediately fails: “Timing a bull-market correction is pointless,” they say.

Stock markets worldwide were under pressure on Monday, with the Japanese stock market’s price loss particularly notable. Analysts say many factors are at play. ‘There is no reason to panic, but it is also not a time to buy.’

The yen carry trade, a longstanding financial strategy of borrowing cheaply in Japan to invest in higher-yield assets abroad, is undergoing a rapid and disruptive unwinding.

While the old-school stocks and bonds portfolio is increasingly supplemented with private investments, specialists suggest this shift might be unnecessary.

Central bank analysis rarely goes beyond predicting the timing of the next interest rate step and the total number of interest rate steps that will be implemented over a given period, writes Jeroen Blokland.