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Kaye: Japan’s tech can now reach the U.S. without excessive tariffs



Kaye: Japan’s tech can now reach the U.S. without excessive tariffs

Morningstar. Richard good morning. It’s good to see you. >> Good morning. Great to see you too. Thank you for having me on. >> All right. What’s your initial take on this deal? First, what does it mean for the U.S. Markets, this deal, what sectors, what areas of this market do you see benefiting? >> I think it’s a great deal for both countries. And the reason is that Japan’s got a lot of fantastic technology that it can offer to the US in areas like semiconductor fabrication software, even some medical technology where Japan has certain diseases specific to the aging society, where it can offer a fantastic technology to the US, and it will now be able to do that without the risk of excessive tariffs. Of course, it’s a great deal for the Japanese as well, in specific industries where they have a great relationship with, with, with the US market. >> So it cuts tariffs in half down to 15% right now. You mentioned chips and you mentioned some other parts. What about the other side of the coin. The fact that we have a better trade deal. Rice is one of the things mentioned also Boeing jets. What other companies or sectors here in the US do you see being beneficiary of exporting to Japan on the back of this deal. >> Rice and agriculture I think is a huge thing, and I think it’s very important to recognize that they waited until the recent election in Japan. There was an election in Japan at the weekend. They wait until that election was done before they announced the trade deal. Why? Because farmers are a massive voting bloc, and obviously rice imports are electorally controversial topic. But the fact that they’ve been able to do that rice import agreement now by a lot of, I think US rice and other agricultural products is a major opportunity for the US and also a very important opportunity for Japan. I live in Japan. Obviously, rice is a huge staple here. There’s a massive shortage of rice because of the aging population of farmers. Rice has been very protected. If Japan opens that market, it’s very important for the Japanese consumer, very important for US agriculture. And I think it means a much more flexible relationship between the between the two countries over time. You mentioned Boeing real quick as well. And that’s that’s a huge opportunity as well, because Japan is obviously hugely dependent on US aerospace technology. Japan also works with Boeing very closely on things like carbon fiber supply. Many of the sensors and motors that are used in aircraft design, and I think a close relationship with Boeing will be extremely important for Japan to many companies, as well as for the US itself. >> All right. So commodity benefits, stock benefit I want to go to the currency very quickly. I’m looking at the chart here. We saw yen futures kind of move to the upside. More broadly. What does this increase in the yen. What does this mean for potentially investing in Japan. Do you think this makes Japan more attractive to global investors and specifically Japanese investors. And does that take money away from the US markets? >> Actually, my answer is yes. On on all of those points, I think that a stabilizing yen, a rising yen actually is a very attractive opportunity for US investors because a lot of people have been scared of Japan because it’s had a record drop in its currency over the last three years. You might be able to make money on the stocks, but you’d lose it back again on the currency. If that’s all changing now with the normalizing and strengthening yen, there’s a very exciting opportunity for us investors to look at this market. You mentioned just now that the domestic Japanese investors, one of the biggest investor bases in the world, that has got an awful lot of cash exposure right now, of course, their domestic markets with a stabilizing currency will be very attractive to them. I want to say one other thing. Just real quick on that. You mentioned earlier reporting how the your auto stocks are up in Europe and so on. They’ve been up in Japan as well today. But obviously the euro, the euro stocks will be benefiting from a cheap cur

Richard Kaye, Analyst and Portfolio manager, at Comgest tells “Worldwide Exchange” the U.S.-Japan trade deal boosts tech and ag sectors, and Japan’s strengthening yen could attract more U.S. investor interest.

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12 Comments

  6. @ohimeni on

    “Pay 15% tariffs, or we’ll just pull our military bases out." It’s really refreshing to have a cutthroat businessman with no moral compass making these deals.

  8. @NeutronizedDjango on

    Short term benefits and long term paralysis?

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