Japanese Yen Remains 'Very Attractive Currency,' Invesco's Chao Says

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Watch Japanese Yen Remains 'Very Attractive Currency,' Invesco's Chao Says - Bloomberg on Dailymotion

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00:00And how do the fundamentals look like and how do they sort of inspire you to invest at this point?

00:05I think that the fundamentals around the world look pretty strong.

00:11We're continuing to move through a phase of uncertainty, which could cause growth to be below trend.

00:18But I think that with central banks around the world, especially in the APAC region, cutting rates,

00:23they do provide a bit of a floor for growth and also for markets.

00:30So I take a more sanguine view of growth outside the U.S.

00:35And also, I think that markets outside the U.S. look a lot more attractive.

00:40Is a floor for the Japanese market the fact that we might get more fiscal spending,

00:46given that the central bank is actually going in the opposite direction and trying to hike rates?

00:52Well, I think that all eyes are still on how the composition of the Japanese government is going to be formed going forward.

01:00And we could be in a very short phase where there is a bit of political uncertainties.

01:07But ultimately, you know, the results of the election were expected, largely expected by the markets.

01:12And I think all eyes are very much on the trade deal now between Japan and the U.S.

01:18And we got some optimistic comments coming out of leaders that a trade deal can be inked very soon.

01:27Where is the Japanese yen headed?

01:29I mean, we've been talking about strength for a while now, but we're now at 148 and continuing to weaken.

01:35I think that very much depends on the direction of the U.S. dollar.

01:42And I think that this recent strength of dollar is just a dead cat bounce.

01:47I think it's likely to reverse action and reverse course.

01:51I think that dollar is likely to weaken.

01:53And that means that, you know, that gives, you know, a chance for the for the Japanese yen to strengthen.

01:59And we continue to expect a tightening monetary policy in Japan in order to counter some of the inflationary effects that we've seen for a while.

02:08So I think that the Japanese yen continues to be a very attractive currency.

02:14We think that it's going to be perhaps one of the best performing currencies in the next 12 months.

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