{"id":1650219,"date":"2022-09-21T05:50:09","date_gmt":"2022-09-21T09:50:09","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1650219"},"modified":"2022-09-21T05:50:43","modified_gmt":"2022-09-21T09:50:43","slug":"asias-macro-hedge-funds-get-ready-for-end-of-yen-weakness","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/asias-macro-hedge-funds-get-ready-for-end-of-yen-weakness\/","title":{"rendered":"Asia\u2019s macro hedge funds get ready for end of yen weakness"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fasias-macro-hedge-funds-get-ready-for-end-of-yen-weakness%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1650219&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p> (Corrects order of surname and given name in second paragraph)<\/p>\n<p>By Summer Zhen<\/p>\n<p>HONG KONG (Reuters) -Asia macro hedge fund managers, many of whom posted strong returns this year, are betting the Japanese yen\u2019s unrelenting slide will end soon and some are even priming for a possible tumble in Japanese government bonds.<\/p>\n<p>Veteran Japan investor Soon Hock Chua\u2019s Asia Genesis Macro Fund closed its short position on yen recently after the short trade contributed about 3 percentage points of the gross return this year.\u00a0The Singapore-based fund had a net return of 9.3% at the end of August.<\/p>\n<p>\u201cWe had short positions in yen since January and closed them at slightly above the 140 level. We are neutral at the current level,\u201d said Chua, the fund\u2019s chief investment officer. <\/p>\n<p>Chua founded Asia Genesis in 1999 and his Japan Macro Fund returned 18.7% annually between March 2000 and 2009. He relaunched the business in 2020 after taking a break.<\/p>\n<p>\u201cJapanese authorities rightly should be concerned about the very weak yen and may intervene,\u201d Chua said, pointing to the jump in Japan\u2019s inflation.<\/p>\n<p>The growing divergence between the Bank of Japan\u2019s ultra-dovish policy and the Federal Reserve\u2019s super-hawkish one has driven the yen down 20% this year against the dollar. The Fed is widely expected to deliver another aggressive hike later on Wednesday, with the BOJ seen standing pat again on Thursday.<\/p>\n<p>The BOJ\u2019s zero-rates policy stance, even as Japan\u2019s inflation has hit its fastest annual pace in nearly eight years, has speculators betting the central bank will eventually have to give up on the vast bond buying project that keeps 10-year yields pinned to zero.<\/p>\n<p>\u201cA change of monetary policy is long overdue,\u201d said Shun Hong Liu, chief investment officer of Hong Kong-based Hong Investment Advisors. Its HCM Rapier Fund Class A generated a 55% net return through the end of August 2022.<\/p>\n<p>Bucking the trend of many other funds, Liu has a long position on the yen at 130-per-dollar and believes a sharp appreciation of the yen could easily happen, like it did in 1998 and 2008. <\/p>\n<p>It would not be a surprise if the Japanese politicians ask BOJ Governor Haruhiko Kuroda to discontinue the ceiling of 0.25% on 10-year JGBs and try to steer the economy away from trouble before his retirement, Liu said. Kuroda retires next year.<\/p>\n<p>\u201cWe have conviction in our long yen position,\u201d he said, adding that the positions so far haven\u2019t affected performance too much as they use the long positions as a hedge on their other short Asian currency trades.<\/p>\n<p>Chua and Liu also warn that JGBs are a bubble that may burst soon, as Japan\u2019s monetary stimulus had merely stoked inflation, instead of generating sustainable economic growth.<\/p>\n<p>\u201cJapan will see the bursting of JGB bubble that it desperately wants to preserve,\u201d Chua said. \u201cIf the yen weakens further and CPI inflation escalates above 3% for a sustained period, this may be coming.\u201d<\/p>\n<p>Nevertheless, betting against Japanese sovereign debt\u2013 a trade famously known as a widow-maker \u2014 has never been easy, given the BOJ\u2019s massive balance sheet and steely resolve to defend its yield curve control settings.<\/p>\n<p>Asia Genesis Macro Fund\u2019s short trades on JGBs were closed out with a 1.2% gross loss this year.<\/p>\n<p>\u201cThe \u2019widow\u2019 trade remains challenging as Kuroda\u2019s BOJ remains steadfast,\u201d Chua said.<\/p>\n<p> (Reporting by Summer ZhenEditing by Vidya Ranganathan and Kim Coghill)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/asias-macro-hedge-funds\/file-photo-illustration-picture-of-japanese-yen-coins-and-banknotes-6\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8K0DR-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8K0DR-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Corrects order of surname and given name in second paragraph) By Summer Zhen HONG KONG (Reuters) -Asia macro hedge fund managers, many of whom posted strong returns this year,<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1650219","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1650219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1650219"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1650219\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1650219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1650219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1650219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}