Japan's Allure as Safe Haven Sparks Interest from U.S. Investors and Buffett

Warren Buffett's recent investments in Japanese trading houses have led to renewed interest in Japanese stocks and currency. However, Bank of America has issued a note of caution, stating that calls to "Buy Japan" are premature. They remain bearish on the Japanese yen in 2023 due to a persistent foreign direct investment deficit and a potential rise of yen-carry trade. Bank of America suggests that buying Japan equities and currency could be a potential trade for 2024, conditional on confirmation of a virtuous inflation cycle in Japan and the government's policy to promote domestic capex and inward FDI.