Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>BOJ sows confusion with hawkish and dovish statements regarding its tightening policy. On a USD-basis the Japan market failed again to break its long-term resistance indicating a "Dead Cat Bounce".</li>
<li>Auto and Semiconductor sectors pressured by US trade policies and Trading Companies are affected by JPY strength.  US rejection of <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a>merger affects Japan steel sector.</li>
<li>Higher domestic yields is a catalyst to reverse the large money flows from Japan during the Kuroda years.</li>
</ul>


BOJ sows confusion with hawkish and dovish statements regarding its tightening policy. On a USD-basis the Japan market failed again to break its long-term resistance indicating a "Dead Cat Bounce".
Auto and Semiconductor sectors pressured by US trade policies and Trading Companies are affected by JPY strength.  US rejection of Nippon Steel Corporation (5401 JP)merger affects Japan steel sector.
Higher domestic yields is a catalyst to reverse the large money flows from Japan during the Kuroda years.


JAPAN:  No Lifeguard on Duty, Swim at Your Own Risk

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

<ul>
<li>The Couche-Tard "friendly bid" raises more questions than it answers: Is it real? What does CT really want? Can it afford it? Will the Japanese government let it through?</li>
<li>We remain sceptical about a bid – if it happens – succeeding. Either way, Seven &amp; Eleven Japan looks to be the much better retailer.</li>
<li>It has been selling 25-40% more than competitors in the world's toughest CVS market and looks set to extract more value in Japan/overseas than anyone else could so why sell?</li>
</ul>


The Couche-Tard "friendly bid" raises more questions than it answers: Is it real? What does CT really want? Can it afford it? Will the Japanese government let it through?
We remain sceptical about a bid – if it happens – succeeding. Either way, Seven &amp; Eleven Japan looks to be the much better retailer.
It has been selling 25-40% more than competitors in the world's toughest CVS market and looks set to extract more value in Japan/overseas than anyone else could so why sell?


For Long-Term Investors, Seven & I Is the Better Bet

<ul>
<li>Japan's markets have again failed to break to new highs creating a potential for a double-top pattern.</li>
<li>Trump's policies which target lower interest rates and a weaker dollar will put pressure on Japan's markets as can be seen from the high correlation between the JPY and TPX.</li>
<li>Sectors such as trading companies, autos and semiconductors could see the most pressure under a Trump presidency.</li>
</ul>


Japan's markets have again failed to break to new highs creating a potential for a double-top pattern.
Trump's policies which target lower interest rates and a weaker dollar will put pressure on Japan's markets as can be seen from the high correlation between the JPY and TPX.
Sectors such as trading companies, autos and semiconductors could see the most pressure under a Trump presidency.


Trump Trades and the JAPAN Market Are Like Oil and Vinegar

Thematic (Sector/Industry)

<ul>
<li>Last week in Japan's retail sector: continued weakness in shopping mall development due to both falling demand from tenants and competition from online.</li>
<li>Don Quijote operator, Pan Pacific posted strong results, reflecting high demand from both locals looking for value and tourists browsing for fun.</li>
<li>The retail sector had a record year in FY23, but a big constraint is the labour shortage but, with many fit older Japanese, some employees are now over 80. </li>
</ul>


Last week in Japan's retail sector: continued weakness in shopping mall development due to both falling demand from tenants and competition from online.
Don Quijote operator, Pan Pacific posted strong results, reflecting high demand from both locals looking for value and tourists browsing for fun.
The retail sector had a record year in FY23, but a big constraint is the labour shortage but, with many fit older Japanese, some employees are now over 80. 


Japan's Retail Week: New Malls Slow, Lawson/Muji Get Closer, Donki Booms and Jobs for the over 80s

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weride-corp" target="_blank" data-smartkarma-citation="entities:39905:1" rel="noopener">WeRide (WRD US)</a>, a provider of autonomous driving products and services, seeks to raise between US$200 to US$300 million through a Nasdaq IPO.    </li>
<li>WeRide is the most commercially successful L4 autonomous driving company globally, measured by commercialization revenue in 2021, 2022 and 2023.</li>
<li>The bull case rests on a large TAM, strong product capabilities, near-term mass commercialization, articulation of a path to profitability, improving earnings quality and presence of blue-chip investors. </li>
</ul>



WeRide (WRD US), a provider of autonomous driving products and services, seeks to raise between US$200 to US$300 million through a Nasdaq IPO.    
WeRide is the most commercially successful L4 autonomous driving company globally, measured by commercialization revenue in 2021, 2022 and 2023.
The bull case rests on a large TAM, strong product capabilities, near-term mass commercialization, articulation of a path to profitability, improving earnings quality and presence of blue-chip investors. 


Japan

Mitsubishi Corporation is a general trading company.  The Company has business groups such as New Business Initiatives, IT & Electronics, Fuels, Metals, Machinery, Chemicals, Living Essentials, and Professional Services.  Mitsubishi diversifies by satellite communications through a joint venture.

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Mitsubishi Corp (8058 JP)

JAPAN: No Lifeguard on Duty, Swim at Your Own Risk

BOJ sends mixed signals on its pace of tightening as the JPY strengthens. Auto, semi and trading company sectors continue to be under pressure. A...

David Mudd

For Long-Term Investors, Seven & I Is the Better Bet

Couche-Tard's bid for Seven & Eleven Japan raises doubts, with skepticism about its success. Seven & Eleven Japan looks to be the superior...

Michael Causton

Trump Trades and the JAPAN Market Are Like Oil and Vinegar

We pointed out that Japan's semi industry may be at risk as part of the "Trump Trade" sentiment. It turns out that Biden has already thrown...

David Mudd

Japan's Retail Week: New Malls Slow, Lawson/Muji Get Closer, Donki Booms and Jobs for the over 80s

Japan's retail sector in the last week: Shopping mall development slows, Don Quijote operator Pan Pacific sees strong demand from locals and...

Michael Causton

WeRide (WRD US) IPO: The Bull Case

The bull case rests on a large TAM, strong capabilities, near-term mass commercialization, articulation of a path to profitability, improving...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JAPAN: No Lifeguard on Duty, Swim at Your Own Risk

BOJ sends mixed signals on its pace of tightening as the JPY strengthens. Auto, semi and trading company sectors continue to be under pressure. A...

David Mudd

For Long-Term Investors, Seven & I Is the Better Bet

​Couche-Tard's bid for Seven & Eleven Japan raises doubts, with skepticism about its success. Seven & Eleven Japan looks to be the superior...

Michael Causton

Trump Trades and the JAPAN Market Are Like Oil and Vinegar

We pointed out that Japan's semi industry may be at risk as part of the "Trump Trade" sentiment. It turns out that Biden has already thrown...

David Mudd

Japan's Retail Week: New Malls Slow, Lawson/Muji Get Closer, Donki Booms and Jobs for the over 80s

Japan's retail sector in the last week: Shopping mall development slows, Don Quijote operator Pan Pacific sees strong demand from locals and...

Michael Causton

WeRide (WRD US) IPO: The Bull Case

The bull case rests on a large TAM, strong capabilities, near-term mass commercialization, articulation of a path to profitability, improving...

Arun George

Couche-Tard's bid for Seven & Eleven Japan raises doubts, with skepticism about its success. Seven & Eleven Japan looks to be the superior...