Archives of “japanese yen” tag

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Japan’s top 20 startups surpass 1tn yen ($9.2 billion) in total value

  
  Analysis
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Startups are continuing to grow in Japan, with a Nikkei survey finding the estimated corporate value of the 20 leading newer businesses increased 22% to exceed a combined value of 1 trillion yen ($9.2 billion) in the year to September. Growth is especially notable in the artificial intelligence and financial technology, or fintech, areas.

Technological innovations have increased startups’ corporate value, but signs of reservations among investors are also emerging in the wake of SoftBank Group-backed WeWork’s high-profile troubles. Masayoshi Son, who announced on Wednesday that his group’s net loss for the July-September quarter was 700 billion yen, admitted regretting a large investment in WeWork. “My investment judgment was poor in many ways,” he said.

Nikkei conducted the survey jointly with the Japan Venture Capital Association to estimate the corporate value of unlisted startups established up to 20 years ago as of the end of September. The valuation, calculated by multiplying the latest issue price of shares by their total number, corresponds to the market capitalization of listed companies.

The corporate value of 181 startups, among 189 firms that responded to the survey, was estimated, with the top 20 found to be worth a combined 1.19 trillion yen. Top-ranked Preferred Networks, an artificial intelligence developer, and two others were valued at more than $1 billion each. In 2018, there was only one so-called unicorn.

Using deep-learning technology, Preferred has been developing self-driving and other technologies jointly with auto giant Toyota Motor. The assessment of the company has grown also because it has expanded its partnerships with other companies, such as joint studies on automated control of oil plants with JXTG Holdings.

TBM, a Tokyo-based materials startup, was placed second in the survey. The company uses limestone to develop alternatives to plastics for items such as shopping bags, and it plans to start building its first overseas factory in China in 2020.

Fourth-ranked freee helps companies address labor shortages with its automated accounting software. The top 20 startups include seven fintech companies, reflecting strong expectations for innovations in financial services. The number of startups each valued at more than 10 billion yen increased about 30% to 63.

Unicorn candidates have also increased in sectors such as health care. According to U.S. research firm CB Insights, the U.S. has some 200 unicorns, or half the world’s total. Britain and India each boast dozens of them, but the number in Japan remains small.

TBM, which develops alternatives to plastics from limestone, attained the unicorn status. (Photo courtesy of the company)

The startup boom began earlier this decade as the digital revolution made headway, prompting large companies to expand investment in emerging innovative firms in a bid to avoid taking major risks alone.

One focal point ahead is the trend of investment, because the boom is partly attributable to the global glut of money. According to Japan Venture Research, privately held companies in Japan raised a total of 421.1 billion yen in 2018, a fivefold increase from five years earlier.

However, office-sharing WeWork’s woes raise the risk of a knock-on effect on other startups, which may find themseves under extra pressure to demonstrate their technology and business growth potential if they are to continue to attract investment.

Until recently, investors have tended to consider it enough for businesses to simply be expanding to warrant their support, but following the WeWork fiasco, there is a new focus on examining their governance of management thoroughly, according to Gen Isayama, general partner and chief executive of WiL, a U.S.-based incubator.

Softbank Group Chairman and CEO Son also referred to corporate governance during the earnings conference. “We will learn from our mistakes on WeWork, and create solid governance standards regarding business founders.”

Meanwhile, investment in startups in the U.S. has ballooned to 14 trillion yen. Amid the bubble-like situation, WeWork has faltered following the failure of its planned initial public offering, making investors more cautious about investment in new businesses.

Next week brings the FOMC and BOJ meetings – forecast range for USD/JPY

  
Analysis, Forex
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A note via MUFG on the yen for the week ahead, analysts looking for 107/111 for USD/JPY.

On the Federal Open Market Committee meeting:
  • USD/JPY has already priced in a rate cut by the FOMC to some degree, so would not react much to a cut. If the Fed does defer on cutting rates, then the initial reaction would likely be USD buying, but stock price weakness would likely cap a rise by USD/JPY
And, on the Bank of Japan:
  • BoJ will maintain current monetary policy
  • BoJ Governor Kuroda commented in an interview that he expects a rate cut, so if the BoJ stands firm on policy, JPY may strengthen slightly but probably not continue. But if the BoJ does make some sort of policy change, JPY would initially weaken but not continue to do so because of concerns about side effects and continuity, and at some point USDJPY would lose steam. 
And, of course on a big driver:
  • Ultimately Brexit continues to loom and there will likely be little sense of direction despite some volatility.
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FOMC on the 30th, Wednesday next week.
BOJ on the 31st, Thursday next week.

A look at the US-China trade war and its impact on markets

  
  Analysis
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The impact escalation will have

The impact escalation will haveThe focus of the market on the China-US trade war is acute due to China’s and the United States economic weight. In 2018 the US’s GDP was above $20 trillion and China’s GDP over $14 trillion, which makes them the world’s two largest economies by nominal GDP.

Furthermore, consider that when you add these two countries GDP together, they account for more than 40% of the world’s entire GDP. So, the first point to grasp is that the significance of a US-China trade war is really a global growth problem.

When you factor in the alliances and trade partners of both countries, the legitimate concern is that a China-US trade war spills over across the entire globe and slows down the entire world economy.

Trade between the US and China

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Crucial Update :US Dollar Index ,EURO ,YEN ,GBP ,INR ,CAD ,AUD ,PESO ,WTI ,SPX 500 -Anirudh Sethi

  
Analysis, Crude, Forex
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The Japanese yen and Canadian dollar were the only major currencies to gain against the US dollar last week.  They are also the only major currencies to appreciate against the dollar so far this year.  US President Trump’s apparent playing down of the pressure to strike a partial deal with China before the 2020 election weighed on stocks and lifted the so-called safe-haven currencies ahead of the weekend.  When everything was said and done, from the attack on Saudi Arabia to the money market squeeze in the US and the Fed’s rate cut, the dollar remained mostly within well-worn ranges.
The exceptions were idiosyncratic.  Growth concerns, both globally and domestically, saw the New Zealand dollar fall to new four-year lows ahead of the weekend.  The RBNZ meets next week, and the market has about six basis points of easing, or about a 25% chance of a cut.  The Australian dollar fell in four of last week’s five sessions and the day rose was by 1/100 of a penny, according to Bloomberg.  Sterling had threatened to break high in the second half of the week, but Ireland’s Deputy Prime Minister helped put Juncker’s seeming optimism in context.  UK Prime Minister Johnson reportedly acknowledged that the EU is unlikely to agree entirely with his proposal at the critical summit in the middle of next month.  These developments pushed sterling a cent off the highest level since July (~$1.2580).
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Berkshire taps Japan’s hunger for yields with $4bn bond debut

  
  Analysis
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Warren Buffett’s Berkshire Hathaway headlined a record day in Japan’s bond market Friday by setting the terms on a 430 billion yen ($4 billion) offering, the biggest yen-denominated issue ever by a foreign multinational.

The U.S. investment group is selling five-, seven-, 10-, 15-, 20- and 30-year bonds.

The biggest chunk, 146.5 billion yen in 10-year debt, carries a 0.44% coupon — an attractive yield at a time when Japan’s benchmark long-term interest rate languishes below zero.

Banks, insurers, asset managers and other investors flocked to Berkshire’s offering, which falls under a global yen bond heading that allows foreign buyers to participate. Debt offerings under this framework have been growing gradually, with such big names as Apple, Starbucks, and Procter & Gamble joining in, and both Wall Street and Japanese financial institutions are pitching bond floats.

The success of the record debt sale could embolden other multinationals to raise capital in Japan’s bond market, where most yen-denominated offerings by foreign issuers have been small.

Berkshire’s AA issuer rating from S&P Global Ratings puts it slightly above the AA- of Japanese blue chip Toyota Motor. (more…)

Jim Rogers: Stocks To Be Crushed Any Day Now

  
Analysis, Education, Global Indices
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Governments need to tighten their monetary policies more according to Jim Rogers. Such tightening will result in stocks being crushed nevertheless.

Bloomberg: “We’re overdue for a correction” said Rogers, chairman of Rogers Holdings, said in an interview in Hong Kong. “Stock markets around the world have been going up for the past 10 months.”

“I don’t think anybody has tightened enough. I think everybody should tighten more,” he told Bloomberg. “We have huge amounts of money printed throughout the world. It’s going to cause currency instability. It’s going to cause more inflation. It’s going to cause higher interest rates.”

An extended, related video of Jim Rogers with Bloomberg is below, start from 11:00 for Jim Rogers. He talks across stocks, stimulus, commodities, and gold in particular.

One of the oddest things discussed however, toward the very end of the video, at 27:00, is how Jim Rogers is long both the U.S. dollar and gold. He’s also long the Japanese yen even though in his own words, it, like the dollar, is a ‘terribly flawed currency’.

 

 

Learning to Trade from a Legend-Victor Niederhoffer

  
  Education
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Study horse racing books. The odds against winning at a parimutuel racetrack are overwhelming. Yet some touts have systems that produce a profit (against all odds). Can you apply any of these horse racing principles to your trading?

• Write down trading prices (by hand). There were a ton of computers in Victor’s trading room. Yet Victor made me do price analysis by hand. He felt there was enormous virtue about getting close and comfortable with trading figures.

• All markets are related. Learn what a move in bonds does to gold. And to S&P futures or the Japanese yen. Don’t trade markets in isolation

• Only make a trade when the odds are at least 60% in your favor.

• Don’t take losses to heart. I lost $20,000 on a Friday, the first day I traded real money for Victor. I wiped out my trading account. After stewing over my losses all weekend, I offered to resign and refund my losses. Victor refused my resignation and put $20,000 back in my trading account.

• Don’t take wins to heart. I remember making a lot of money following (I thought) Victor’s instructions while he was away. When Victor returned, he was not impressed by the fact the firm made money. He told me that I had traded erroneously and was lucky to have survived my trades.

• Be a mentor. Victor was generous with his time and advice. Despite the fact that several employees exploited his generosity, Victor continued to help new traders.

•  Get out when the trade is over. All trades have a beginning and end (based on time and price). Get out whether you’re winning or losing when the time or price has been met.

• Write down your moves. Learn from your mistakes.

• Learn concentration and game strategy from champions in other disciplines (such as ping-pong and checkers).

Japanese Public Debt 2X GDP With Deflation Threat

  
Analysis, Economy, Education
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In summary, Japan has “$9.5 Trillion in public debt”, 2x GDP (192% 2009 estimate, #2 behind Zimbabwe at 3x from CIA.gov) with threats of deflation and falling wages. This is after 2 lost deflationary decades and a loss of 75% on the NIKKEI index since 1990 (39,000 to 9,700 today, 1st chart below). The good news is, most of Japan’s public debt is held domestically in Japanese Yen. Some analysts believe US Treasuries could end up like Japanese Government Bonds (JGBs) and catch a bid even with hardcore reflationary policies (see David Rosenberg’s debate on March, 2010). What about the S&P, would it follow the NIKKEI’s footsteps in a deflationary environment?  Or is the US economic machine too strong for that to happen.A 75% drop in the S&P from the October 2007 peak would be around 400, which is David Tice’s S&P target. What are the odds. Paul Krugman had an op-ed in the New York Times today titled The Third Depression. Hopefully Gold and the S&P move in tandem from here if more $ printing is coming. The 10-Year US Treasury Note is trading at $122 resistance in an ascending triangle (Chart 2) and I’m going to see what happens with the $USD at its 50 day moving average tomorrow.


Euro surpasses US dollar as the currency of online casinos

  
Analysis, Education
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At the dawn of the online gambling industry in the 1990s, the U.S. dollar was the major currency accepted in online casinos, but those days are over. The euro has replaced USD and is now the most popular currency. According to the latest research by KeyToCasino, the euro is currently accepted in 79% of all existing online casinos. 

The use of the U.S. dollar changed after the Unlawful Internet Gambling Enforcement Act (UIGEA), legislation regulating online gambling, was passed in the United States. The UIGEA has prohibited all gambling sites from accepting deposits online, forcing U.S.-oriented casinos out of business. At the same time, online gaming business in Europe has flourished, and many online casinos re-oriented their business towards European customers.

It has been 10 years since UIGEA, and many new online casinos have opened throughout this period. They have never considered targeting the U.S. market and never planned to include USD as a currency that is available for deposits. Players from countries with economically unstable currencies were forced to use the euro for their casino transactions.

American currency is not completely out of the gaming business however. It remains the second most popular currency in online casinos, followed by the British pound, which is accepted in 58% of online casinos. However, the overall popularity of Scandinavian currencies, which include the Norwegian krone, Swedish krona, and Danish krone, beats the pound because Norway, Sweden, and Denmark have the highest population ratio when it comes to casino popularity.

Among the other currencies that have become prevalent on online gaming market, there are the South African rand, South Korean won, and Russian ruble. The least popular are the Japanese yen and Chinese yuan. The Australian dollar beats the Canadian dollar in popularity because unlike in Australia, the legality of online casinos in Canada is uncertain, which results in the Canadian dollar not being widely accepted at online casinos.

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