Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Helaba Research FX FOCUS 18 December 2014 Japanese yen AUTHOR Christian Apelt, CFA phone: +49 69/91 32-47 26 [email protected] EDITOR: Claudia Windt PUBLISHER: Dr. Gertrud R. Traud Chief Economist/ Head of Research Helaba Landesbank Hessen-Thüringen MAIN TOWER Neue Mainzer Str. 52-58 60311 Frankfurt am Main phone: +49 69/91 32-20 24 fax: +49 69/91 32-22 44 While the major currency pairings remained fairly stable, commodity currencies, in particular, came under pressure, some considerably so; the Russian ruble collapsed. The Japanese yen depreciated once again noticeably in recent months. Although Japan’s expansionary monetary policy is weighing on the currency, growth will improve slightly following the recession in 2014, which means that the central bank will not necessarily take further steps. In spite of the approval by the voters, there are legitimate questions about the effectiveness of “Abenomics”. Various indicators suggests that the yen is undervalued. The weakness of the yen should therefore come to an end, and the yen should stabilize against the US dollar and especially against the euro. Helaba Currency Forecast Euro performance on a month-over-month basis % vs. euro compared to the previous month (from 11/18 to 12/17/14) 1,6 0,0 1,2 0,0 Japanese yen British pound Swiss franc Canadian dollar -1,3 Australian dollar -5,4 New Zealand dollar -1,2 Swedish krona -2,3 Norwegian krone -7,7 0,4 Czech koruna Polish zloty -0,4 This publication was very carefully researched and prepared. However, it contains analyses and forecasts regarding current and future market conditions that are for informational purposes only. The data is based on sources that we consider reliable, though we cannot assume any responsibility for the sources being accurate, complete, and up-to-date. All statements in this publication are for informational purposes. They must not be taken as an offer or recommendation for investment decisions. US dollar Hungarian forint -2,7 Russian ruble -21,6 Turkish new lira -3,5 0,3 -1,1 -2,4 -3,6 -3,0 -5,4 South Korean won Chinese yuan Indian rupee South African rand Brazilian real Mexican peso ■ Core currencies ■ Rest of G10 ■ Currencies of emerging markets Sources: Bloomberg, Helaba Research HELABA RESEARCH · 18 DECEMBER 2014 · © HELABA 1 FX FOCUS JAPANESE YEN JPY: stabilization The Japanese yen just keeps falling – notwithstanding a slight stabilization most recently. During the first half of the year the Japanese currency was actually one of the winners. But a wave of selling began again in the summer. The yen already depreciated drastically between the fall of 2012 and the end of 2013. Japanese politics played a significant role in this intended devaluation. No change of course is in sight following the re-election of Prime Minister Abe. Will the Japanese currency continue to decline or even go into a free fall is politics can no longer control the weakness? Politically generated yen depreciation The LDP under Shinzo Abe took over the reins of government at the end of 2012. Since then, Japanese politics has been pursuing a higher inflation. To that end, the Bank of Japan (BoJ) expanded its asset-buying programs massively, not least to weaken its own currency. In addition, the government passed several spending programs. After initial successes, however, growth waned, especially when the VAT was raised from 5 % to 8 % in the spring of 2014. Japan’s economy is now in a recession, and GDP shrank in the third quarter by no less than 1.3 % over the previous year. The BoJ expanded its buying program once more, and its monetary base is now to rise by 80 instead of 70 trillion yen annually. The even more expansionary monetary policy and the weaker economic data were the reasons behind the renewed yen weakness. Recession instead of upswing Private consumption suffering from low real wages GDP year-on-year or quarter-on-quarter in % % yoy Sources: Macrobond, Helaba Research Sources: Macrobond, Helaba Research What is Abe using his power for? After Prime Minister Abe’s surprise move to dissolve the lower house of parliament and simultaneously postpone the second stage in the VAT hike to 2017, his LDP defended its clear majority in the recent new election. At the very least, Abe need not pay much attention to coming elections. But it is by no means certain whether, in addition to restarting the nuclear power plants, he will in fact undertake the structural reforms that have been put off so far – including in the areas of free trade agreements, the labour market, and the agricultural sector. Not only is there some opposition within his own party, Abe, who held the office of prime minister once before in 2006/07, does not give the impression of being a radical reformer. Thus the focus could be more on the foreign policy agenda. Abe seems currently completely unchallenged as Prime Minister, but it will not stay that way in Japan if he has no successes to show. On balance, the growth effects of “Abenomics” have been modest. To be sure, initially the economic mood brightened, which stimulated investments noticeably in 2013. However, businesses have already been much more restrained again this year. While private consumer spending was convincing in the lead-up to the hike in the VAT, the slump in the spring was that much more pronounced. In the face of declining real wages – the government appeals for wage increases should hardly help – no major growth impulses will come from consumption. Moreover, because of the low savings rate, households have hardly any reserves. In contrast, government demand is remaining positive, meanwhile the necessary consolidation of the budget is not making any headway. HELABA RESEARCH · 18 DECEMBER 2014 · © HELABA 2 FX FOCUS JAPANESE YEN “Abenomics” without sustained success“ The depreciation of the yen by means of monetary policy, which is intentional within the framework of “Abenomics”, was supposed to strengthen foreign trade, just as the textbooks teach. But Japan’s current account balance improved only recently. In addition to higher capital incomes from abroad, this resulted from lower energy imports. Although exports rose nominally, in some cases quite markedly, adjusted for price – that is, without the yen effect – they stagnated. It was only most recently that real exports improved noticeably. The decline in the exchange rate produced only limited impulses for foreign trade, at least so far. And since companies are also hardly using their higher profits to boost investments, and since private households actually suffered income losses from the higher import prices, the overall success of this policy is rather questionable. Current account balance improved ony recently Yen with unusually favourable valuation % of GDP Real, trade-weighted exchange rate index Sources: Macrobond, Helaba Research Sources: Macrobond, Helaba Research Japan no Zimbabwe The asset purchases by Japan’s central bank have pushed the ten-year yield to a record low. Since the BoJ is by now buying up the majority of issues, the interest rate level would be noticeably higher without these purchases, especially since the national debt is exorbitant at 240 % of GDP. This kind of monetary policy and state finances makes one think more of states like Zimbabwe, where the government´s printing of money has caused hyperinflation. However, the economic structures of the two countries are profoundly different. Most recently, inflation in Japan stood at right around 3 %, which is already unusually high for that country. But if one takes out the hike in the VAT and the higher import prices resulting from a weaker yen, there is not much left. Inflation will decline in 2015. Even if politics is a cause for concern from a long-term perspective, it is highly unlikely that the Japanese economy will falter any time soon. Interest rate differences do not reflect yen weakness ECB policy dampens euro-yen exchange rate JPY ratio % points Sources: Macrobond, Helaba Research JPY * Assumption: BoJ boost monetary basis by 80 trillion yen annually ECB basis rises to 2012 high. Sources: Macrobond, Helaba Research When it comes to the current account balance, Japans will increase its shrunken surplus again thanks to higher exports and lower energy imports. Moreover, the country has considerable assets abroad. The economy will grow again slightly in 2015. On the basis of purchasing-power parities or HELABA RESEARCH · 18 DECEMBER 2014 · © HELABA 3 FX FOCUS JAPANESE YEN the real exchange rate indexes, the yen is by now markedly undervalued. Although the interest rates are exceedingly low in Japan, in terms of a historical comparison sovereign bonds are not yielding much more either in the euro zone or in the US. Adjusted for inflation, as well, the yields in Japan are not that low if inflation eases next year. Nothing points to a renewed expansion of the central bank’s asset-buying program. Moreover, it is open whether this measure will be continued to its full extent also in 2016, given its rather questionable success. Limited yen depreciation against US dollar In spite of a multitude of problems, the situation is not that gloomy for the yen. Many speculators have already taken a position against the Japanese currency. For example, some carry trades were financed in yen, and they will be unwound if the risk aversion in the financial markets rises again. And since the dollar-yen exchange rate, in particular, is strongly oversold in terms of the technical data, there is short-term recovery potential here. Although the upcoming interest rate turnaround in the US will presumably carry the dollar-yen rate once more over the 120 level in 2015, the yen should stabilize thereafter. Since the ECB, with the expected buying programs, is moving virtually along Japanese tracks, the euro-yen exchange rate should actually weaken somewhat over the coming months. Helaba Currency Forecasts Performance year to date 1 month vs. Euro current* Forecast horizon at end ... Q1/2015 Q2/2015 Q3/2015 Q4/2015 (vs. Euro, %) US dollar 11,4 1,6 1,23 1,20 1,15 1,20 1,25 Japanese yen -1,2 0,0 146 143 140 142 144 British pound 4,8 1,2 0,79 0,78 0,77 0,75 0,77 Swiss franc 2,2 0,0 1,20 1,22 1,22 1,22 1,25 Canadian dollar 1,7 -1,3 1,44 1,37 1,30 1,33 1,36 Australian dollar 1,4 -5,4 1,52 1,41 1,38 1,43 1,47 New Zealand dollar 4,5 -1,2 1,60 1,58 1,53 1,58 1,60 Swedish krona -6,5 -2,3 9,46 9,10 9,00 8,80 8,70 Norwegian krone -8,8 -7,7 9,14 8,40 8,30 8,10 8,00 vs. US-Dollar (vs. USD, %) Japanese yen -11,2 -1,5 119 119 122 118 115 Swiss franc -8,2 -1,5 0,97 1,02 1,06 1,02 1,00 Canadian dollar -8,7 -2,9 1,16 1,14 1,13 1,11 1,09 Swedish krona -16,0 -3,9 7,67 7,58 7,83 7,33 6,96 Norwegian krone -18,1 -9,1 7,41 1,57 7,00 7,22 6,75 6,40 US-Dollar vs. … (vs. USD, %) British pound -5,9 -0,4 1,56 1,54 1,49 1,60 1,62 Australian dollar -8,9 -6,8 0,81 0,85 0,83 0,84 0,85 New Zealand dollar -6,2 -2,7 0,77 0,76 0,75 0,76 0,78 *17.12.2014 Sources: Bloomberg, Helaba Research HELABA RESEARCH · 18 DECEMBER 2014 · © HELABA 4 Darstellung möglicher Interessenkonflikte bei der Weitergabe von Anlageempfehlungen („Finanzanalysen“) gem. § 34b WpHG und MAR Diese Publikation wurde weitergeleitet von der Landesbank Hessen-Thüringen. Dieses Institut unterliegt der Aufsicht der Europäischen Zentralbank und der Bundesanstalt für Finanzdienstleistungsaufsicht. Diese Publikation wurde erstmals am 18.12.2014 um 15:34 Uhr weitergegeben. Sie gibt die von dritten erstellten Anlageempfehlungen inhaltlich unverändert weiter. Die Helaba hat vor deren Weitergabe durch den Ersteller keinen Zugang zu diesen Publikationen. Bezogen auf Finanzinstrumente oder Emittenten, die direkt oder indirekt Gegenstand der jeweils weitergegebenen Anlageempfehlung sind, können folgende Interessenkonflikte der Helaba bzw. eines mit ihr verbundenen Unternehmens auftreten: Landesbank Hessen-Thüringen Girozentrale 1. Die Helaba und mit ihr verbundene Unternehmen betreuen an einem Markt Finanzinstrumente, die selbst oder deren Emittenten Gegenstand der Anlageempfehlung sind, durch das Einstellen von Kauf- oder Verkaufsaufträgen. Hausadresse Friedrichstraße 74 40217 Düsseldorf Betroffene Werte: B+S Banksysteme AG Postadresse Postfach 10 28 23 40019 Düsseldorf Villeroy & Boch AG Telefon 02 11 / 82 6 - 05 Telefax 02 11 / 82 6 - 31 84 2. Die Helaba und mit ihr verbundene Unternehmen haben einen Handelsbestand in Aktien der folgenden Gesellschaft: Internet www.helaba.de Betroffene Werte: Bankleitzahl 300 500 00 Sanofi S.A. SWIFT-Adresse WELA DE DD Uniper SE UST.-Id.-Nr. DE 114 104 159 3. Die Helaba und mit ihr verbundene Unternehmen handeln regelmäßig in Aktien der folgenden Gesellschaften. Amtsgericht Frankfurt am Main, HRA 29821 Jena, HRA 102181 Betroffene Werte: Adecco Group AG adidas AG Airbus SE Allianz SE alstria office REIT-AG Atos SE Aurubis AG AXA S.A. Axel Springer SE Banco Bilbao Vizcaya Argentaria S.A. (BBVA) Banco Santander S.A. Sitz Frankfurt am Main Erfurt Evonik Industries AG Fielmann AG freenet AG Fresenius Medical Care AG & Co. KGaA Fresenius SE & Co. KGaA GEA Group AG Prudential Financial Inc. Rheinmetall AG Royal Dutch Shell PLC Gerresheimer AG GN Store Nord AS Hannover Rück SE RWE AG SAP SE Schaeffler AG Schlumberger N.V. (Schlumberger Ltd.) Shire PLC Siemens AG HeidelbergCement AG Hella KGaA Hueck & Co. Société Générale S.A. Software AG -2- BASF SE Bayer AG Bayerische Motoren Werke AG Beiersdorf AG Brenntag AG Cisco Systems Inc. Colgate-Palmolive Co. Comcast Corp. Commerzbank AG Continental AG Covestro AG Daimler AG Danaher Corp. Danone S.A. Deutsche Bank AG Deutsche Börse AG Deutsche Lufthansa AG Deutsche Post AG Deutsche Telekom AG Deutsche Wohnen AG Dialog Semiconductor PLC Dollar General Corp. [New] Dürr AG Engie S.A. E.ON SE Henkel AG & Co. KGaA HOCHTIEF AG STADA Arzneimittel AG Starbucks Corp. HUGO BOSS AG Infineon Technologies AG Intesa Sanpaolo S.p.A. KION GROUP AG Koninklijke Philips N.V. K+S Aktiengesellschaft L'Air Liquide - Société Anonyme pour l'Étude et l'Exploitation des Procédés Geor LANXESS AG Linde AG LVMH Moët Hennessy Louis Vuitton SE MAN SE Merck KGaA METRO AG MTU Aero Engines AG Münchener RückversicherungsGesellschaft AG in München Murray and Roberts Holdings Ltd. Nestlé S.A. Omnicom Group Inc. STMicroelectronics N.V. STRATEC Biomedical AG Südzucker AG Swisscom AG Swiss Re AG Symrise AG Orange S.A. Vonovia SE OSRAM Licht AG PayPal Holdings Inc. Wirecard AG WPP PLC Zurich Insurance Group AG ProSiebenSat.1 Media SE Mit freundlichen Grüßen Landesbank Hessen - Thüringen Compliance-Stelle TAG Immobilien AG Talanx AG Telecom Italia S.p.A. The Priceline Group Inc. thyssenkrupp AG Total S.A. Unilever N.V. United Internet AG Uralkali PAO Valéo S.A. va-Q-tec AG Volkswagen AG -3- Finanzgruppe Weitergabe von Anlageempfehlungen nach Art. 8 DVO1 hier: Offenlegung von Informationen und möglicher Interessenkonflikte Diese Publikation wurde Ihnen am 14.06.2017 überreicht von der Die Sparkasse unterliegt der Aufsicht der Europäischen Zentralbank und der Bundesanstalt für Finanzdienstleistungsaufsicht. Die Sparkasse gibt diese Publikation unverändert weiter. Sie hatte keinen Zugang zu der Publikation, bevor sie diese vom Ersteller oder einer anderen weitergebenden Stelle erhalten hat. 1 Delegierte Verordnung (EU) 2016/958 im Hinblick auf die technischen Regulierungsstandards für die technischen Modalitäten für die objektive Darstellung von Anlageempfehlungen oder anderen Informationen mit Empfehlungen oder Vorschlägen zu Anlagestrategien sowie für die Offenlegung bestimmter Interessen oder Anzeichen für Interessenkonflikte.