Japan’s annus volatilitis: negative rates, Brexit and then Trump

SYDNEY (Dec 19): For investors in Japan’s markets this year, it’s been a case of one shock after the next in a pattern that might have prepared them well for the era of Donald Trump and his reputation for the unexpected.

The yen, Topix and Japanese government bond market -- the largest outside the US -- led reactions to global shocks in 2016, from January’s China-fueled turmoil to the Brexit jolt to Trump’s surprise US presidential-election victory. There were also the domestically manufactured shocks: the Bank of Japan’s adoption of negative interest rates, then shift to yield-curve control.

While risks in 2017 span a China hard landing or another euro-region crisis flare-up to a super-size US economic upsurge, the historic market shifts this year may be hard to repeat.

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