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Feb 18
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WATCH
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Tyler Kendall
Multimedia Editor
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Japanese exports to the US fell 5% in January, and the country faces a "higher tariff" threat if they do not fund these projects within 45 days of announcement. While Japanese global exports are rising, the US relationship is under pressure. This deal is effectively a "pay-to-play" agreement where Japan must invest capex to avoid tariffs. If they miss the 45-day funding window, tariff implementation would hurt Japanese exporters significantly. WATCH Japanese markets for confirmation of funding; failure to execute could trigger a bearish tariff event. Supreme Court rulings on broader tariffs (mentioned in the video regarding EPA tariffs) could complicate the trade environment regardless of this specific deal. |
Bloomberg Markets
Japan, US Reach $36 Billion Gas, Mineral Proj...
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Feb 18
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LONG
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Ben Carlson
Director of Institutional Asset Management, Ritholtz Wealth Management
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Japanese bond yields are hitting records, and inflation is rising, yet the stock market is surging. Contrary to the fear that rising rates will break Japan, this signals the end of financial repression. The economy is normalizing, allowing for inflation and growth, which is driving equity performance (outperforming the S&P 500 over the last 5 years). Bullish on the structural changes in the Japanese economy. A rapid spike in yields could cause short-term volatility or currency instability. |
The Compound News
Is AI a Mistake? | Animal Spirits 452
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Feb 17
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LONG
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Ben Carlson
Director of Institutional Asset Management, Ritholtz Wealth Management
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"We are looking at the worst start to the year for US stocks versus MSCI World since 1995... European stocks, Pacific stocks... are just smoking the S&P." A combination of a potentially weakening dollar, "Sell America" sentiment due to political/AI risks, and attractive valuations abroad is driving capital overseas. The momentum is now self-reinforcing as these markets hit multi-year highs. LONG International Equities (Developed and Emerging) to chase the momentum and valuation gap. A sudden strengthening of the US Dollar or global geopolitical instability. |
The Compound News
“Unrealized” Capital Gains Tax is Economic Su...
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Feb 17
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LONG
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Dan
Morgan Stanley Analyst
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The speaker explicitly states, "Stick with the international trade... whereas the AI centric optimism has now ceded to concern, that's obviously benefiting international." He also cites "policy and fiscal tailwinds helping Japan, helping Latin America." As the "AI trade" in the US becomes crowded and faces skepticism (disruption fears), capital is rotating into undervalued markets. Europe and Japan offer a "valuation discount" combined with new fiscal catalysts that were previously absent, making them the primary beneficiaries of the US tech pause. LONG International markets as the momentum baton passes from US Tech to global value/cyclicals. Global recession or a resurgence of US exceptionalism driving the dollar higher. |
Bloomberg Markets
Tech Stocks Dip as AI Doubts Linger on Wall S...
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Feb 17
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LONG
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Russ Koesterich
Chief Investment Strategist, BlackRock
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Koesterich points to "better value opportunities outside the US," specifically citing Japan (fiscal stimulus) and Korea/Taiwan (semiconductor rally). Skelly mentions the "global reflation trade" where the US has ceded leadership to these regions. While the US struggles with high valuations and AI doubts, Asian markets offer the same tech/semi exposure (AI hardware) at lower multiples, plus idiosyncratic catalysts like Japan's corporate governance/fiscal shifts. LONG Asian developed/emerging markets. Global trade wars or US dollar strength reversing. |
Bloomberg Markets
Bloomberg Surveillance 2/17/2026
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Feb 17
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$56566
$57586
+1.8%
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LONG
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—
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The strategist states, "We have seen Asia take the lead in 2026... It is not China... Japan market continuing to go up another 7% to 10% this year." He cites new leader Takaichi's reform policies and controlled inflation. The "End of US Exceptionalism" implies capital flow must go somewhere. Japan is the primary beneficiary due to political stability (majority house), fiscal stimulus, and a focus on "technology and robotics." LONG Japan equities, specifically focusing on the broad index and the robotics sector mentioned. JGB yield spikes (though strategist claims inflation is under control). |
Bloomberg Markets
Futures Slip Ahead of US Return; Iran-US Talk...
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Feb 17
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LONG
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Adam
Market Strategist / Guest
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"I think there's definitely a bullish case to be made for Japan. You kind of see that in the post-election reaction to equity markets." The market views the new government (Takeuchi/Ishiba context) and potential stimulus as a stabilizing force, encouraging capital flows into Japanese stocks. LONG Japan as a post-election momentum play. Fiscal discipline concerns or currency volatility. |
Bloomberg Markets
UK Jobs Data Gives Green Light to March BOE C...
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Feb 16
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LONG
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Mark Cranfield
Cross Asset Strategist, Bloomberg
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Japan's GDP came in much weaker than expected following a contraction in the previous quarter. Weak economic data forces Prime Minister Takaichi to embark on "fiscal expansion" (spending). This reinforces the "Takaichi Trade": printing money/spending stimulates stocks (Nikkei) but devalues the currency (Yen) and hurts bonds. Continue the short JPY / long Equity trade as fiscal stimulus becomes necessary. The Bank of Japan might still hike interest rates despite weak growth, which would strengthen the Yen. |
Bloomberg Markets
Rubio Warns Europe & Warner Bros. Mulls New P...
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Feb 13
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LONG
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Kathy Jones
Chief Strategist, Charles Schwab
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Kathy Jones notes a "diversification away from the US" and that investors are moving into markets that "have more potential to do better," specifically citing Emerging Markets. Alex Wolfe confirms a pickup in flows into Europe and Japan. The US Dollar is softening (or rangebound), and the Fed is easing (albeit slowly). A weaker dollar historically boosts Emerging Markets and non-US equities as capital rotates out of crowded US trades seeking better valuations. LONG non-US assets to capture the capital rotation. A resurgence in US inflation forcing the Fed to hike, strengthening the USD. |
Bloomberg Markets
US CPI Fuels Fed Wagers, US Inflation Comes I...
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Feb 13
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$56941
$57586
+1.1%
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LONG
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CME Group Presenter
Host/Narrator
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"Goldman Sachs sees the topics up over 10% in the next 12 months, while some Nikkay targets aim for 52,000 to 55,000... on 8 to 9% earnings growth." The macro backdrop of wage growth (>5%) and GDP recovery (~1%) provides fundamental support for equity valuations to expand despite the tightening cycle. LONG Japanese broad market indices to capture the earnings growth and reflationary cycle. Wage growth missing targets or a spike in bond yields destabilizing the fiscal situation. |
Bloomberg Markets
Which Direction for Japan’s Economy? | Presen...
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Feb 13
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LONG
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Ryan Detrick
Chief Market Strategist, Carson Group
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"I love what Japan did this week... Japan said they're going to spend a lot of money." Fiscal stimulus ("spending money") is a direct injection of liquidity into the economy. This generally boosts corporate earnings and equity valuations in the local market. LONG. Follow the fiscal stimulus. Currency volatility (Yen fluctuations) negating equity gains for foreign investors. |
CNBC
Markets weigh geopolitics, tariffs and tech p...
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Feb 13
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LONG
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The US market has underperformed and turned negative for the year, whereas Asian markets are up over 10%. The speaker notes Asia is "at the top of the supply chain" for infrastructure, equipment, and chips (specifically TSMC, Korean memory makers, and Japanese firms). Capital is rotating from US software/tech into Asian hardware/semiconductors because these regions control the physical constraints of the AI boom (chips/memory) and are offering better relative performance than the S&P 500. LONG Asian hardware and indices as the "rest of the world" trade outperforms the US. A global recession dampening demand for semiconductors or geopolitical tensions in the Taiwan Strait. |
Bloomberg Markets
S&P 500 Erases Year’s Gains, Asia Prospers: 3...
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Feb 13
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$56941
$57586
+1.1%
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LONG
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Julia Wong
North Asia CIO, Nomura International Wealth Management
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Prime Minister Takaichi has a "mandate for growth" following a landslide election win and is pursuing fiscal expansion and industrialization. Political stability combined with explicit pro-growth fiscal policy removes the uncertainty that plagued Japanese markets previously. The "Takaichi tailwind" supports equities despite potential currency volatility. LONG. Fiscal stimulus and corporate governance reforms continue to drive the Japanese equity narrative. Rising JGB yields could pressure equity valuations if fiscal spending gets out of control. |
Bloomberg Markets
AI Angst Rocks Asia Markets | The Asia Trade ...
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Feb 12
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$57639
$57586
-0.1%
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LONG
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Scott Wapner
Host, CNBC
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Scott Wapner cites data showing international markets (Israel, Brazil, Japan, UK) "trounced" the U.S. trade last year. He notes that PIMCO and Amundi are explicitly pivoting away from U.S. assets due to "unpredictable policies" and valuation gaps. The U.S. market's dominance has forced global competitors to adopt shareholder-friendly reforms (like Japan's corporate governance changes). As major asset managers reallocate capital to these cheaper, reforming markets to diversify political risk, international indices will capture the flow. LONG International/EM indices to capture the rotation. U.S. exceptionalism continues; global geopolitical instability. |
CNBC
How to play the "sell U.S." trade
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Feb 12
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LONG
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Joseph Amato
Neuberger Berman
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Japan has shifted from a deflationary to an inflationary regime, combined with a push for better shareholder returns (ROEs). This structural shift makes Japan a distinct growth story separate from US Tech. It offers diversification with improving corporate fundamentals. LONG Japan for structural reflation and governance reform. JPY currency volatility impacting unhedged returns. |
Bloomberg Markets
Bloomberg Surveillance 2/12/2026
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Feb 12
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AVOID
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Peter Navarro
Senior Counsel on Trade and Manufacturing (Trump Adviser)
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"Every country that we trade with is like fingerprints... they cheat us in their own way... India... Japan... China... [Trump] goes country by country... and he sets the tariffs according to how badly they're cheating us." The confirmation of a "bespoke" (highly specific and likely punitive) tariff regime introduces significant uncertainty for export-driven economies. Japan (non-tariff barriers) and China (mixed barriers) are explicitly named as targets, suggesting their exporters face imminent margin compression or volume loss. Avoid markets heavily reliant on US exports until specific tariff schedules are announced. Diplomatic negotiations could result in exemptions or softer deals than implied by the hardline rhetoric. |
Bloomberg Markets
Navarro says it's "criminal" how much Jamie D...
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Feb 11
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LONG
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Rahm Alawalia
CEO, LuminArx Capital
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Rahm states, "You should own Japan... Japan in the last 12 months is up 40%... The JP Morgan of Japan [MUFG] is up 57%." He notes corporate governance reforms are working. As capital leaks out of the crowded US Mag 7 trade, it seeks value and performance. Japan offers structural growth (governance reform) and value valuations compared to US tech. Long Japan as a beneficiary of the global rotation into value and international markets. Currency volatility (Yen) or a reversal in corporate governance reforms. |
Unchained (Chopping Block)
Would BlackRock Try to Save Bitcoin From the ...
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Feb 11
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LONG
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While Europe is mixed, the speaker notes "positive surprises in Asian regions, Japan in particular." The combination of "political clarity" regarding economic policy and positive earnings surprises creates a "good omen for continued earnings trends going up" in Japan. LONG. Currency fluctuations (JPY volatility) affecting export earnings. |
Bloomberg Markets
Software Selloff Is a Chance to Increase Expo...
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Feb 09
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$56363
$57586
+2.2%
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LONG
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Andrew Ross Sorkin
Co-Anchor, Squawk Box
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Japanese Prime Minister Sanae Takaichi and the Liberal Democratic Party secured a "supermajority" (more than two-thirds of seats) in the snap election. Political stability and a strong mandate allow the government to push through economic policies without gridlock. Markets hate uncertainty; a supermajority removes it. The Nikkei jumped 3.9% to a record high above 56,000 immediately following the victory. The Yen has strengthened ~3.5% YTD against the dollar. Global economic slowdown affecting Japanese exports. |
CNBC
Squawk Pod: Super Bowl ads & GLP-1 competitio...
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Feb 08
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WATCH
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Bob Elliott
Substack author, Nonconsensus
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Bob Elliott highlights upcoming Japanese wage data (released during Super Bowl) and a "fading currency rally after threats of intervention," noting he needs to "refresh my thinking here." Strong wage data could signal a shift in the Bank of Japan's ultra-loose monetary policy, potentially leading to JPY appreciation. However, the "fading currency rally" and intervention threats introduce significant uncertainty. The author's need to refresh thinking suggests a complex and potentially volatile situation. Monitor Japanese wage data, BoJ commentary, and JPY price action closely for a clearer directional signal. Avoid taking a strong directional stance until more clarity emerges, but be prepared for potential volatility in JPY (e.g., FXY) and Japanese equities (e.g., EWJ). BoJ maintains dovish stance, actual currency intervention, global risk-off sentiment driving safe-haven flows into JPY despite domestic factors. |
Nonconsensus
The Week Ahead 2026.02.08
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