Japan- Takaichi’s High Stakes Gamble
Investment Strategy.
Ms Takaichi informed the leadership of the LDP and Ishin no Kai on Jan 14 that she will dissolve parliament on January 23. The election will then take place in early February – 8 or 9 th .
The outcome will not affect the Yen, Bond yields, BoJ policy or fiscal policy. But it may give a “Takaichi push” to equities until the elections based on the hope of yet higher fiscal spending. That won’t happen even if Takaichi is victorious.
The Wealth Preservation Portfolio has no exposure to the Yen and is short Japanese 10yr JGBs with a target yield of 2.8%. There two global core equity sectors that merit a big long-term holding in Japan: defence and ship building. But the overall market does not.
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