BTC iShares Currency Hedged MSCI Japan ETF

The BoJ’s monetary policy was the most awaited macro event this week. It was the first major central bank to expand its easing program after the Brexit vote.

Gross believes that money has stopped generating growth and inflation. Equity prices are artificially elevated, and negative yields are guaranteeing capital losses.

Japan is the largest accessible bond market in Asia (source: Barclays Multiverse Index as of 7/29/16), but the problem is the yields for many local bonds are negative.

We can expect muted returns from US equities going forward. US stocks face the prospect of higher interest rates, albeit gradual and from unusually low levels.

The trade surplus for Japan increased to 692.8 billion yen for June—compared to a deficit of 60.9 billion yen in the same month last year.

The IMF expects Japanese economic growth to be 0.5% in 2016—the same as in 2015—and to tick up to 0.6% in 2017.

One of the key features of Japan’s new monetary policy framework is its inflation-overshooting commitment.

Japan’s economy showed no growth on a quarterly basis in 2Q16—compared to growth of 0.5% in the previous quarter and forecasts of a 0.2% expansion.

Market participants believe that the BoJ (Bank of Japan) needs to do more to beat deflation and propel the Japanese economy to sustainable long-term growth.

The BoJ is the one of the largest holders of Japanese (DFJ) government bonds and also a major player in equity markets.