When will the Yen carry trade liquidation trigger? "Has the Japanese economy's lost 30 years really ended?" / Why asset allocation should be done when it's hot and good?

Summary

Dr. Yoo Shin-ik, economist, analyzes Japan's fiscal surplus trajectory, yen carry trade liquidation triggers, and the implications for global markets. He is broadly bullish on Japanese equities, construction, real estate, defense, and materials, while warning that decelerating AI momentum—as seen in Micron—calls for gradual portfolio rebalancing before the next slowdown. Yen carry trade risk is currently muted but will reignite when profit peaks signal a turn.

• Japan's fiscal balance is rapidly shifting from deficit to surplus, with a record-low bond dependency ratio.
• Corporate profits are surging on weak yen and AI-driven exports of semiconductors and chemical materials.
• Government spending on social security and defense is boosting domestic demand and construction investment.
• Tokyo commercial and residential real estate are both rising, unlike the U.S. where only residential is strong.
• Yen carry trade liquidation remains a tail risk; it will resurface when corporate profit momentum peaks.
• Micron's EPS growth is decelerating sharply, suggesting AI semiconductor momentum is peaking.
• Investors should gradually reallocate when assets are hot, rather than waiting for a clear top.