S&P 500: Butterfly Effect From Japan Rate Hike
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Envision ResearchInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryJapan's anticipated rate hike marks a historic shift, ending decades of ultra-loose policy.Narrowing US-Japan yield spreads may trigger unwinding of yen carry trades, pressuring US equities and bonds through capital outflows.Japanese investors, as the largest foreign holders of US Treasuries, are likely to accelerate reductions in US bond holdings post-hike.While rising rates and normalized inflation in Japan signal renewed growth of its economy, making ETFs like EWJ and BBJP interesting supplements to US equity. Mary Wandler/iStock via Getty Images Japan’s 25 bps Rate hike Given how deeply interconnected the global financial system is, in this article, I want to explore the potential butterfly effect of the expected rate hike by the Bank of Japan. For readersThis article was written byEnvision Research19.12K FollowersFollowEnvision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.