Bloomberg Daybreak: Asia Edition 2025 New Year's Eve Special
Dec 31, 2024
Vishnu Varathan, Head of Economics and Strategy at Mizuho Securities, shares insightful analysis on the APAC economy, highlighting potential shifts in market dynamics and the impact of Japan's monetary policy. Ed Rogers, CEO of Rogers Investment Advisors, discusses Japan's economic indicators and the prospects of a rate hike, alongside increasing foreign investment interest. The conversation digs into the broader global economic risks, from the decline of diplomacy to future fiscal challenges, setting the stage for 2025's financial landscape.
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Yen Volatility in 2025
- 2025 may be just as dramatic as 2024, especially concerning the Japanese yen and monetary policy.
- The yen's volatility stems from diverging US and Japanese interest rates and potential policy errors.
Interdependent Central Bank Policies
- Central bank policy moves are interdependent and influenced primarily by the Federal Reserve's actions.
- The Bank of Japan's longer time horizon for signaling policy changes creates miscommunication and mispricing in the market.
Dollar Strength and Yen Weakness
- Persistent dollar strength and a weaker yen are likely in the first half of 2025, contingent on US economic performance and tariff outcomes.
- The yen's trajectory hinges on Fed convergence and a negotiated tariff outcome rather than escalating trade tensions.