RetireJapan

TokyoWart wrote: ↑Thu Sep 12, 2024 12:39 am If you think about the yen-dollar exchange rate over the last 35 years or in relation to purchasing power parity, the yen is till incredibly weak.

When I started investing, the yen was about 80 yen to the dollar. So with the yen currently at around 142 yen to the dollar, there's definitely a lot of potential strengthening.

ChapInTokyo wrote: ↑Thu Sep 12, 2024 12:49 am

Tsumitate Wrestler wrote: ↑Thu Sep 12, 2024 12:12 am

RetireJapan wrote: ↑Thu Sep 12, 2024 12:06 am

Adding extra Japanese equity or emerging markets to a world index is not increasing diversification, it is adding concentration to those areas

Indeed, Emaxis Slim All Country represents EM and Japanese equities at the market rate. The REIT exposure is up for debate though.

Also, I do not think anyone is looking at 1 month periods with these kinds of investments. The recommended minimum target period for a global equity approach is a decade at least.

Personally I am over weighting Japanese equities as well as world small cap value companies in my portfolio. These will not move in lock step with the companies included in the AWCI index.

As for the 1 month period of the google finance chart, I could not get a 10 year chart because of the inception date of the ETFs, but here is a 5 year chart. I think that you can see that correlation is not high among these asset classes.

Here is the 10 year, with dividend reinvestment. (Google finance does not do this).

Tsumitate Wrestler wrote: ↑Thu Sep 12, 2024 1:08 am

ChapInTokyo wrote: ↑Thu Sep 12, 2024 12:49 am

Tsumitate Wrestler wrote: ↑Thu Sep 12, 2024 12:12 am

Indeed, Emaxis Slim All Country represents EM and Japanese equities at the market rate. The REIT exposure is up for debate though.

Also, I do not think anyone is looking at 1 month periods with these kinds of investments. The recommended minimum target period for a global equity approach is a decade at least.

Personally I am over weighting Japanese equities as well as world small cap value companies in my portfolio. These will not move in lock step with the companies included in the AWCI index.

As for the 1 month period of the google finance chart, I could not get a 10 year chart because of the inception date of the ETFs, but here is a 5 year chart. I think that you can see that correlation is not high among these asset classes.

Here is the 10 year, with dividend reinvestment. (Google finance does not do this).

re.png

Ah, that's pretty nifty! Is the free version of Tradingview worth signing up to?

ChapInTokyo wrote: ↑Thu Sep 12, 2024 7:38 am Ah, that's pretty nifty! Is the free version of Tradingview worth signing up to?

It's was an instant sign-in with my burner Google account.

Google finance is only good for quick check, not any sort of detailed analysis.

The yen carry trade seems to be back with a vengeance. A good time to unload my Vanguard Short Term Treasuries ETFs, convert the funds to yen while the yen is cheap, and load up on nice cheap Japanese stocks!

No, It is the Dollar that keeps going from strength to strength!
It buys more and more Yen...

Yen keeps going from Weakness to Weakness!
It buys less and less Dollars...

The Dollar Yen Exchange Rate is the number of Yen you can buy for $1
This is great if you are being paid in Dollars, or buying Japanese Goods abroad or traveling to Japan - Everything is 30% to 50% off...

If you do 100 / USDJPY You will see the buying power of Y100

@Y80 = $1.25
@Y90 = $1.11
@Y100 = $1
@Y110 = 91c
@Y120 = 83c
@Y130 = 77c
@Y140 = 71c
@Y150 = 66c
@Y160 = 62.5c

Half the value of 12 years ago
This is not great if you are being paid in Yen, or buying Foreign Goods in Japan or traveling abroad - Everything is 50% to 100% more expensive...

Yen exchange rates are the opposite of most other exchange rates. They are always quoted in Yen per 1 unit of the other currency, so you always have to consider the reciprocal.

From 160 to 140 to 160 in just a few weeks. I think this latest burst of dollar strength will force the MoF to intervene again and the BoJ to hike rates again. Hopefully that will help arrest this latest decline.

The question is when the BOJ will intervene, and put the frighteners on the carry traders. Hopefully I can sell my dollars off while the yen is still weak!

Explainer: What is the yen carry trade?
https://www.reuters.com/markets/asia/wh ... 024-08-07/

When I first came in '85, for a couple years, the yen was over 200 to the dollar. By mid '88 when I was becoming 'stuck' here (married, and later kids, seishain, and so on) it was 120-130. But in '98 it was back up in the 140s, and people then (who insisted they were smart) were forecasting that it would go lower, and to buy as many dollars as possible.

It did, but it just took another 25+ years. (I should've held the yen.)

And now there's now... Will it go lower, or will history repeat itself?

Let me check my magic 8-ball...

As a carry trader type, let me confirm that MOF intervention and a few pop-gun grade rate hikes by the BOJ won’t bother me.

For me to change my view I’d need to see a pretty much 180 degree reversal in the direction of fiscal policy here, or a change in monetary policy back to the old approach. Given the recent election results here I see little chance of that, and will continue to buy dollar/yen on dips.

People might be over optimistic about the recent US election outcome…