Carlsquare/Vontobel weekly trading note: The sun rises in the east
Prenumeration
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The U.S. Supreme Court's rejection of President Trump's tariffs, followed by Trump's imposition of new, higher tariffs, has created continued uncertainty for companies and stock markets. Meanwhile, the Japanese Nikkei index has shown a strong trend over the past six months. Given the ruling Liberal Democratic Party's victory in February's parliamentary elections and the fact that its main export partners in Asia benefit from the most recent tariff decision, we believe the Japanese yen will strengthen against the U.S. dollar.
Following the U.S. Supreme Court's ruling, China, India, and Brazil seem to be the biggest winners in terms of tariffs and trade. Since April 2025, President Trump's unpredictable changes to tariff policies have caused global investors to reduce their exposure to U.S. assets and the U.S. dollar. Historically, a weak USD has favored economic growth in emerging countries. Over half of Japan's exports go to Asia, a trend that bodes well given current economic conditions. Furthermore, the Liberal Democratic Party's landslide victory in February, combined with the Nikkei stock index performing far better than its U.S. counterparts over the past six months, suggests that the Japanese yen should also strengthen against the U.S. dollar.
The likelihood of a U.S. attack on Iran is growing. It is estimated that 40 to 50 percent of the U.S. Air Force's global deployable capacity has been gathered in the Middle East. Brent Oil was up around 4 USD per barrel during the last week.
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