The Go Global investment strategy has outperformed Stay Home this year, and August has not changed that. Korea and Taiwan are back at the front of the performance rankings to start the month, with China lagging again.
Last week, Japan and the US jointly bought yen for the first time since 1998, following its fall to a near 40-year low of around 164 yen per dollar. US Treasury officials feared that the Japanese would be forced to sell US Treasuries to support their currency. The yen recovered to 157.94. Treasury Secretary Scott Bessent told CNBC on August 4 that "you can give market signals with intervention, but it's policy that turns it." Despite the noise, global financial markets didn't flinch on fears that the yen carry trade might unwind, as discussed further below.
Here's more:
(1) Performance. Korea and Taiwan lead the mtd rankings in dollar terms, up 5.7% and 6.8%, with South Africa the only market ahead of them (chart). China and Hong Kong are negative, and Brazil is at the bottom at -3.6%. The US is up 3.5%, ahead of both the ACWI and ACWX.
The ytd table shows similar performance rankings, with much greater divergence among the results. Korea is up 70.8% and Taiwan 62.3%, with EM ex-China third at 30.3% (chart). The US has been grinding higher at 13.4%.
