The Bank of Japan's (BOJ) declared intention to end its longstanding policy of quantitative easing will lead to greater volatility in bond markets domestically and possibly overseas, according to Threadneedle.
Fitzsimmons said the BoJ’s statement of intent could have ramifications for overseas markets too. He added: “In the long term, the narrowing of interest rate differentials between Japan and the rest of the world would make Japanese investors less keen to buy foreign assets. This is also likely to drive the yen higher.”
As global markets become less predictable, Fitzsimmons beleived this was a good opportunity to add value in his fund. “In a volatile environment, funds that are able to use both long and short-strategies have a clear advantage,” he said. “It does not matter how the market behaves, as long as you are the right side of the call.”
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