JPMorgan: A stronger yen will ease pressure on Japanese government bonds, while AI and semiconductor sectors may accelerate their recovery.

JPMorgan Securities Japan strategists noted that yen strength is expected to ease upward pressure on Japanese government bond (JGB) yields, thereby spurring an earlier recovery for Tokyo-listed AI and semiconductor sectors. Strategists including Rie Nishihara wrote in a report that the recently underperforming real estate sector could also stand to benefit. Some sectors are facing negative impacts on earnings from yen appreciation, such as transportation, logistics, and automotive industries. JPMorgan’s view on potential gains for Tokyo’s AI and semiconductor sectors stands in contrast to Saxo Bank’s global stock outlook for the same segments. Saxo strategist Charu Chanana previously stated that a yen rebound could trigger liquidation of some crowded and leveraged positions. (Jinshi)