< The 2014 All-Japan Research Team
Daisaku Ueno of Mitsubishi UFJ Morgan Stanley Securities Co. debuts on this lineup in third place. Citing in part headwinds from the U.S. Federal Reserve’s less accommodative monetary policy combined with the Bank of Japan’s more expansionary stance, Ueno forecasts that the yen will continue to deteriorate against the dollar. Also contributing to pressure on the currency, he advises, are Japan’s large trade deficit — a record ¥2.79 trillion ($27.2 billion) in January — and increased capital outflows. Multiple factors are driving the fund flows, the strategist notes, including an acceleration of Japanese companies’ purchases of foreign counterparts; the January launch of Japan’s Nippon Individual Savings Account program, which provides individuals with a tax-free mechanism for moving cash deposits to stock markets; and the sustained push by Japanese pension funds to increase their allocations to foreign currency–denominated assets, as a hedge against the yen’s weakness. Despite all these negative inputs, and although he doesn’t foresee a long-term decline for the dollar, Ueno does anticipate occasional, short-term dollar depreciation against the yen. Accordingly, he recommends buying greenbacks on the dips. |