Stronger Yen
Jingyi Pan, market strategist at IG Asia
“The key element of payroll tax relief remains missing at present and looks to be a difficult one to come by rendering the need for President Trump to make the call for a unified decision to implement it. Broadly, however, the suggestions of capital and liquidity provision for small businesses had perhaps been widely expected.”
“Dollar-yen can be seen continuing the slide past the 104 level, no surprise as risk aversion interest gathers with the travel ban announced, which is also expected to carry with it economic implications on both sides.”
Virus Spread
Ross Cameron, head of Northcape’s Japan office in Tokyo:
“In the absence of strong social distancing measures, which will likely have a severe economic cost, we believe the virus is likely to continue to spread rapidly. In aggregate markets are still not fully pricing this in our opinion.”
“However, so far the sell-off has been quite indiscriminate; there are already opportunities to selectively buy shares in companies, which are relatively unimpacted but are now trading at cheap valuations.”
Failed to Deliver
Mingze Wu, a trader at INTL FCStone in Singapore:
”Trump has failed to deliver any strong stimulus plan that market was hoping will help boost U.S. economy, and the travel ban is a bit excessive.”
“Global central banks’ stimulus and interest rate cuts are inflationary measures in so far that they encourage spending to increase the velocity of money through the entire economy. However, this is not something that can be solved by lowering cost. I want to fly to Japan for my vacation but I literally can’t -- not because I cannot afford it, but because flights are canceled due to the virus.”
--With assistance from Ruth Carson, Chikako Mogi, Min Jeong Lee, Lilian Karunungan, Heejin Kim, Abhishek Vishnoi, Hooyeon Kim, Tian Chen and Jeanny Yu.