Asia-Pacific

Investment Insights by our experts and thought leaders

BOJ’s YCC shift parallels a Fed pattern

In what was probably the best kept secret of many years, the BOJ unanimously agreed to shift its YCC policy well before virtually any economist or market watcher expected. The largest question people seem to have is “why now?”. As with most major decisions, the answer was likely a confluence of several important items.

2023 Asian equity outlook

As we look towards 2023, it is easy to be overwhelmed by the broader permutations of possible outcomes. But things don’t appear so dire in Asia. Inflation, which is effectively a value transfer from net consumers to net producers, may continue to benefit India and pockets of ASEAN due to favourable demographics and rising productivity.

2023 Japan equity outlook

As geopolitical risks and globalisation are reassessed in the wake of the COVID-19 pandemic and war in Europe, we believe that Japan stands to benefit as more companies refocus on their home markets.

2023 New Zealand fixed income outlook

New Zealand’s Official Cash Rate and short-term interest rates may stay elevated in 2023 but longer-term interest rates are likely to decline starting in the second half of the year as financial markets begin pricing in the possibility of rate cuts. Falling rates could see a stabilisation of the housing market and an improving outlook for the economy and financial market returns.

2023 New Zealand equity outlook

Labour shortages and inflation are expected to pressure the New Zealand economy in 2023. That said, New Zealand’s listed market is more defensive than the broader economy with large weights in defensive sectors such as utilities and telecommunications.

2023 Singapore equity outlook

We expect a moderation of growth, a peak in inflation and a more accommodative monetary policy in 2023. We see this as a positive for Singapore, as we believe a more accommodative policy backdrop will help support continued expansion in corporate earnings growth in 2023.

2023 Asian rates and FX outlook

Most Asian countries are expected to grow at a slower pace in 2023 than they did in 2022, and fiscal stimulus will no longer be a dominant factor driving growth in the region. We expect monetary policy outlook to persist as the primary driver of rates in 2023 with focus on the potential end to the tightening cycle.

2023 Asian credit outlook

We believe that the benign macro backdrop should remain supportive for credit fundamentals in 2023. The fiscal deficits of Asian economies are expected to gradually narrow as the need for pandemic support decreases.

Japan’s “show me the money” corporate governance: 3Q, another record high

The just-released 3Q CY22 data on aggregate corporate profits in Japan was very positive, with the overall corporate recurring pre-tax profit margin hitting a record high on a four quarter average.

The potential implications of China’s 20th Party Congress

China’s 20th Party Congress ended on 23 October with President Xi Jinping winning an unprecedented third term as expected. We provide a brief analysis of the Congress and the impact it could have on China’s zero-COVID policy and the capital markets.

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