This is an updated (Jan 24) short note (link below) regarding safe haven trending from 2 days ago. No, this and related bonds do not a trend make; but something this house montiors. Regardless of any news today or from past years about a weak economic position of Japan; the Yen and Japanese bonds are still a safe haven play when risk aversion is in place globally. In spite of ongoing problems in the Japanese economy, Japan remains a very powerful global economic force.
One may presume further short term strength across many safe haven areas; which should include many developed nations gov't. bonds as well as some corp. bond areas. High yield and emerging market bonds may not perform as well at this time.
My 2 cents worth on bonds.
Regards,
Catch
Yen rally Note: this short article is continuing to have updated info. What I read 2 days ago is now changed somewhat; as well as what was in place just 2 hours ago.
Comments
I agree that a few days is not a trend but there's also the idea that all of the various issues that have caused the dismay in the market recently will probably be swept under the rug again. Various issues over the last five years have popped up, only to be smoothed out by throwing money at the problem. It works until it doesn't. When it stops working is when things get very interesting. This is....(shrugs).
I wouldn't even monitor currency movements that closely, I just feel like in today's world it's largely futile and just so day-to-day. What's the "favored currency" this week? Meh. Emerging market currencies are getting wrecked because of events in Argentina and a couple of other countries; that may provide opportunities for EM asset investing when EM's get pulled down because of a few countries which I think have been in turmoil for a while.
I wouldn't go anywhere near Japanese bonds and to me I just don't have much interest in fixed income in general. I do think there are a couple of interesting options in terms of preferred stocks, but I'm not going to do much there.
I do think that if some specific EM countries get worse (The iShares Emerging Markets Index ETF (EEM) is off 1.3% in the premarket as investors rush out of emerging currencies. The Turkish lira plunged to a record low today, while Ukraine's hryvnia fell to a four-year low, and South Africa's Rand dove to its weakest since October 2008 following Argentina's decision to devalue the peso and a weak PMI report out of China yesterday. - http://seekingalpha.com/news/1524901-contagion-spreads-for-emerging-currencies), it will be an opportunity.
I've raised my oversized coffee cup to clink against your Diet Coke container.
You noted: "It's just all such ultra short-term thinking and ADHD investing. You have a pile-in on a certain theme (short yen) and the second it turns the other way, it's the whole everyone running from one side of a ship to the other at once. Unfortunately, I don't have a lot of confidence in the Japanese economy and don't see what they're doing improving the fundamentals."
Won't disagree with the above, in general; but I will still monitor movements in bond areas to find whether there is a greater connection to global equity moves. I can not allow short term (say, a month or less) to turn my head around too far, but I'll surely monitor.
Our house is letting others determine whether to buy/sell Japanese bonds.....ex: LSBDX .
Thanks again for your input.
Take care,
Catch