Bloomberg: Yen to Hit Bottom at 120 Before Rallying, Economist Jen Says

The yen will slump to 120 per dollar in six months as the Federal Reserve raises U.S. interest rates but that’s about as weak as it will get, former International Monetary Fund Economist Stephen Jen says.

The currency will rebound to 100 by early 2018 as the Bank of Japan’s policies of controlling yields and adding stimulus through bond purchases reach a limit, said Jen, chief executive officer at hedge fund Eurizon SLJ Capital Ltd. in London. The central bank already holds more than 40 percent of local government bonds on issue, up from 14 percent before it started an expanded debt-purchase program in April 2013.

“The BOJ is closer to the limits of their unconventional monetary policy than any other central bank,” Jen said in an interview last week. Once all its options are exhausted, the yen will return to its fair value of around 90 per dollar, he said.

Read the original article on the ‘Bloomberg’ website.

FT: Slow growth in Mexico casts doubt on merits of Nafta

“Despite joining Nafta, the economic growth rate of Mexico has been remarkably slow in recent decades, not only compared to its own past but also relative to many other Latin American economies,” says Stephen Jen, head of Eurizon SLJ Capital, an investment fund.

“It is just not evident, by eyeballing charts on Mexico’s macro data, that Nafta has had any meaningfully positive effects on the Mexican economy. Mexico is quite a remarkable economy, in a negative sense, unfortunately. It has tried hard but achieved little.”

Read the original article on the ‘FT’ website.

Bloomberg: China’s $1.4 Trillion Silk Road Is Bigger than the Marshall Plan

Dubbed ‘One Belt, One Road,’ the plan to build rail, highways and ports will embolden China’s soft power status by spreading economic prosperity during a time of heightened political uncertainty in both the U.S. and EU, according to Stephen L. Jen, the chief executive officer at Eurizon SLJ Capital Ltd., who estimates a value of $1.4 trillion for the project.

“This is a quintessential example of a geopolitical event that will likely be consequential for the global economy and the balance of political power in the long run,” said Jen, a former International Monetary Fund economist.

“The fact that this is a 30-40 year plan is remarkable as China is the only country with any long-term development plan, and this underscores the policy long-termism in China, in contrast to the dominance of policy short-termism in much of the West,” said Jen.

Read the original article on the ‘Bloomberg’ website.

FT: Eurizon banks on the Italian financial system

Last year, Eurizon entered a joint venture in the UK by partnering with SLJ Macro Partners, a British hedge fund company. The two groups have launched one fund since forming the partnership, in which Eurizon owns a 65 per cent stake, and another fund launch is planned for the autumn.

The new Eurizon SLJ Capital funds will be managed by an investment team based in London but domiciled in Luxembourg.

When questioned whether London, in the wake of the Brexit vote, is the right place for an asset manager looking to grow internationally, Mr Corcos is adamant Britain will remain a big financial centre. This is because of the strength of its laws and its ability to attract talented people, he says.

He appears not to have lost his appreciation of the UK capital since the Brexit vote. “No one knows how we will finish with Brexit, but I still think London is very interesting for companies like ourselves,” he says.

Read the original article on the ‘FT’ website.

SLJ Macro Partners and Eurizon Capital SGR – the asset management arm of the Intesa Sanpaolo Group of Italy, with a total AUM of EUR260 billion – have reached a strategic partnership agreement for the development of the asset management business in the UK

Read the original article on the ‘Eurizon Capital’ website.