LONDON: Investors are positioning for a regime change in global markets as the Bank of Japan edges closer to ditching the policies that depressed the yen for decades, thereby luring Japanese money back home.
The BOJ, by flooding its financial system with cheap cash and keeping interest rates below zero for years, turned its currency into the ideal funding vehicle and sent trillions of dollars of Japanese cash overseas in search of better returns.
It is now the last holdout in the global race to raise rates, but with Japanese inflation at multi-decade highs, the yen has steadily strengthened.
That means portfolio managers are having to factor a stronger yen into global stock selection in way they…
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