Kyle Bass Still Bearish On Yen, Warns About Japanese Stocks

0

Kyle Bass is warning about the Japanese market — again. He’s been saying for some time that he believes Japan’s economy is collapsing. Now he’s warning that Japan may lose control of its bond market once investors realize that the nation’s government debt-to-GDP ratio is the highest in the world.

Kyle Bass Still Bearish On Yen, Warns About Japanese Stocks

The yen has steadily declined against the U.S. dollar quite rapidly in recent months, and many investors who bet against the yen also went on to buy Japanese stocks. However, speaking on CNBC, Bass said that Japanese stocks aren’t such a great investment right now.

Q2 Hedge Funds Resource Page Now LIVE!!! Lives, Conferences, Slides And More [UPDATED 7/6 22:21 EST]

Q2 Hedge Funds Resource PageSimply click the menu below to perform sorting functions. This page was just created on 7/1/2020 we will be updating it on a very frequent basis over the next three months (usually at LEAST daily), please come back or bookmark the page. As always we REALLY really appreciate legal letters and tips on hedge funds Read More


In fact, he called investors who short the yen and then buy Japanese equities “macro tourists” and said he believes that those who do buy Japanese equities will end up being disappointed.

In Kyle Bass’ view, Japan may start looking into purchasing foreign bonds, and if the nation does that, he predicts there will be “an implicit trade war” that begins with its purchase of foreign bonds.

This week the Bank of Japan decided to double the monetary base of the yen over the next two years; Bass called that decision “a giant experiment.” He said the nation had to do something because its debt has grown so large. He also pointed out that thus far, the actions of Japan’s central bank have devalued the nation’s currency

According to Kyle Bass, Japan must get the yen up to the dollar by the end of next year, but if its central bank loses control, the yen will simply continue to weaken.