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Markets Face 'Points Of Fragility'; BCA Warns Japan Remains An Underestimated Risk

2025 Key Views Update

  • Our hypothesis that tech stock valuation downside and yen upside are exposed to a normalisation of the Japanese real bond yield is yet to be fully tested. On a medium-term horizon, this is an underestimated risk that justifies overweighting the yen and underweighting overvalued tech.

  • A supply-constrained US labour market is preventing a sharp rise in unemployment but steering the US economy into a ‘mini stagflation’.

  • Chinese government bond yields have a lot further to fall.

  • New tactical trades: Long JPY/EUR, short platinum.

via July 10th 2025