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Protective trade friction between USA and China, flight to real estate

2018.04.01

The market of the world is greatly shaken by the protectionist trade policy of the Trumpu administration. Starting with the plunge of US stocks on September 22, Asian stocks and European stocks including Japan were totally destroyed on 23rd. Money escapes to the yen that is regarded as a safe asset and the government bonds of developed countries, the appreciation of the yen and the decline of the interest rate progress. Market became vigilant about the risk of a stall in the global economy which brought about a brisk global trade war. (Source: Nikkei)


According to China's infringement of intellectual property rights, it raises up to 1300 items and tariffs of 25% to 60 billion dollars (about 6 trillion yen). Meanwhile, China, which opposed it, mentioned the purchase reduction of US Treasury bonds. "I am considering every option".

Actually, China has 1.17 trillion dollars (over 120 trillion yen) of US Treasury bonds as of the end of January 2018. China's intent is uncertain, but the impact on the US bond market is not small.

If the US-China trade friction got into full swing, it is fully conceivable that funds escape from the capital market. I imagine that it is still real estate that can be thought of as a huge amount of funds receivers. We believe that there is a possibility that yen x real estate as a safe property, that is, real estate in Japan, may attract attention again due to external factors.

Within the Trump regime, with the resignation of Secretary of State Tiraison, who emphasized international dialogue, and Chairman of the National Economic Council (NEC), the chaotic international situation is anticipated. The movement of money needs to be even more careful.