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. 

Equity Bottom-Up

<ul>
<li>Aeon has finally published numbers on its e-commerce growth and performance.</li>
<li>It has a ¥1 trillion target for FY2025 and while this is still a far off target, Aeon is making progress. </li>
<li>Digital sales have doubled in the past two years and Aeon is now well ahead of Seven &amp; I which continues to fail to present a coherent e-commerce plan.</li>
</ul>


Aeon has finally published numbers on its e-commerce growth and performance.
It has a ¥1 trillion target for FY2025 and while this is still a far off target, Aeon is making progress. 
Digital sales have doubled in the past two years and Aeon is now well ahead of Seven &amp; I which continues to fail to present a coherent e-commerce plan.


Aeon Shows up Seven & I in E-Commerce Growth and Strategy

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).</li>
<li>The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.</li>
<li>Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors</li>
</ul>


Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).
The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.
Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors


Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Thematic (Sector/Industry)

<ul>
<li>Daiso is usually known for standing back and throwing mountains of plastic into cramped stores and selling it all for ¥100 per item. </li>
<li>Daiso has moved on in the past few years and now has new formats that not only sell at higher prices but offer a level of quality that surprises customers.</li>
<li>Its latest chain, Standard Products, targets Muji and Nitori in home categories for anything smaller than a desk and is representative of the growing sophistication and reach of discount retailing.</li>
</ul>


Daiso is usually known for standing back and throwing mountains of plastic into cramped stores and selling it all for ¥100 per item. 
Daiso has moved on in the past few years and now has new formats that not only sell at higher prices but offer a level of quality that surprises customers.
Its latest chain, Standard Products, targets Muji and Nitori in home categories for anything smaller than a desk and is representative of the growing sophistication and reach of discount retailing.


<ul>
<li>As more suppliers announce price increases, larger retailers are turning to discount campaigns to establish some early price credibility before competition gets even fiercer. </li>
<li>Lower prices will increasingly attract customers as price sensitivity quickly rises, benefiting discount retailers.</li>
<li>But, with the Yen so low, import prices are also set to add to the pressure pin standard price retailers – a full list of vulnerable retailers below.</li>
</ul>


As more suppliers announce price increases, larger retailers are turning to discount campaigns to establish some early price credibility before competition gets even fiercer. 
Lower prices will increasingly attract customers as price sensitivity quickly rises, benefiting discount retailers.
But, with the Yen so low, import prices are also set to add to the pressure pin standard price retailers – a full list of vulnerable retailers below.


Japan's Big Retailers Resist Price Pressure

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Quantitative Analysis

<ul>
<li>We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.</li>
<li>Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a> has seen the largest short covering as the stock has tumbled in the last couple of weeks.</li>
</ul>


We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.
Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.

China Merchants Bank H (3968 HK) has seen the largest short covering as the stock has tumbled in the last couple of weeks.


Asia Short Interest: Large Moves in April

Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

Aeon Shows up Seven & I in E-Commerce Growth and Strategy

Aeon is now showing up Seven & I in e-commerce. While both retailers are behind specialty retailers in online share of sales, Aeon is now far ahead...

Michael Causton

Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Despite the intact downtrend on Japan's TOPIX, relative strength is reversing topside a 4.5-year downtrend; this tells us Japan is emerging as...

Vermilion Research

Daiso: Going After Muji and Nitori

Daiso Sangyo is known for cheap and cheerful 100 Yen stores but is fast expansing new higher priced chains which could well cause problems not only...

Michael Causton

Japan's Big Retailers Resist Price Pressure

The pressure on costs should just mean that retailers raise prices but with competition so intense, standard retailers are trying to resist raising...

Michael Causton

Asia Short Interest: Large Moves in April

Short notional in Korea and Taiwan has been increasing as the market has been moving lower. Shorts on China Merchant Bank have been covered in...

Brian Freitas

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