d 1.9% in CY16 (Chart 13). One explanation is that private consumption is simply being underestimated in demand- side GDP statistics: researchers at the Bank of Japan recently produced experimental supply-side estimates of GDP that were significantly higher than existing expenditure- side statistics. We find the Bo

u of Labor Statistics BOE: Bank of England BOJ: Bank of Japan CAGR: compound annual growth rate CDS: credit de

75 70 65 60 55 50 1/1/2010 5/1/2011 8/4/2012 = 1/1/2014) 5/1/2015 = 9/1/2016 Source: BofA Merrill Lynch Global Research true against the JPY given the Bank of Japan is pegging 10y JGB yields at zero. We are cognizant of the possibility that the willingness of Japanese investors — who have already bought record am

last week’s biggest losers were Korea’s KOSPI and India’s NIFTY, which each returned -0.8% week-over-week. In Japan, the Nikkei fell 0.3%. On Friday, the Bank of Japan (BoJ) left its monetary policy unchanged—it will continue to control the yield curve via its negative benchmark rate and its asset purchasing program

should profit in the medium term. e Longer-term debt issues and weak competitiveness of major exporters are hurting the Japanese economy. Therefore the Bank of Japan and Ministry of Finance will maintain an expansive policy and continue to try weaken the JPY. However, current positive growth dynamics are supportiv

Foreign Exchange We remain underweight the Japanese yen. The Japanese economy continues to weaken against its peers, leading to rising pressure for the Bank of Japan to engage in further quantitative easing. We have closed our preference for the Canadian dollar following its recent strength, and therefore close ou

believe inflation comes after growth and therefore isn't a threat to this cycle of easy monetary policy. We expect the Fed, European Central Bank and Bank of Japan will continue to promote "easy money." There is going to be an inflation shock that will come with accelerating growth-we just don't see it next year