We at investorAi like to keep an eye on stories that many other investors seem to miss and the potential for rate hikes in Japan could have one of the biggest and most devastating impacts to European and American markets as it will directly affect the carry trade.
This story concerns the fact there are some big names with big short positions reckoning that the Bank of Japan (BoJ) will raise interest rates again.
Vanguard, the world’s second-largest asset manager, has reinforced its short position in Japanese government bonds (JGBs), anticipating that the Bank of Japan (BOJ) might still deliver an additional 50 basis points in rate hikes by December.
Additionally, M&G Investment Management has continued to expand its short position on JGBs while maintaining a strong position in the yen. Meanwhile, RBC BlueBay Asset Management has been offloading Japan’s 10-year sovereign bonds.
Although these strategies diverge from the broader market sentiment, whe ...
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