The financial world, usually ruled by calculations and charts, has become filled with the expectation of a miracle, as if on Christmas Eve. Thus, BlackRock, along with other investors, decided to shift their focus to Japanese assets without waiting for the Bank of Japan to raise the interest rate from a zero level.
These financial organizations started buying stocks of Japanese companies as if they were the last copies of a rare edition of a book. In addition, they began betting on government bonds and investing in the yen, anticipating its approaching jump.
What is more, the Japanese labor unions reported spectacular wage gains, making the situation even more attractive for investors. The Bank of Japan, unwilling to stay behind the scenes, dropped a hint about a rate hike from -0.1% to an impressive 0.25% by the end of 2024. Against this backdrop, government bond yields soared, while the weak yen encouraged exporters.
RBC BlueBay Asset Management was among the first to notice the upcoming changes and bet on ten-year government bonds. Abrdn plc and Robeco also quickly realized that they could benefit from the yen.
BlackRock, like a wise mentor, anticipates gradual rate hikes, thus supporting equities. It reminds us that in the world of finance, there are sometimes events full of expectation and hope.
Against this backdrop, investors choose the most lucrative and safest assets in an attempt to earn a large income.
If the Bank of Japan continues promoting the idea of rate hikes amid sustained economic development, lenders may face success.
