Jonathan, always crowded with families, is shutting down near the house.
Third waves of Covid 19 is hitting restaurants hard in Tokyo. If you ever visit Tokyo, you must have seen these on the streets. Yoshinoya shutting down 150 out of 1207 stores.
Ground floors are vacant around the Meguro station. Where did people working there go?
Corona vs. Equity market
New infections are increasing day by day. Unfortunately, it’s caused by Go to Travel and Go to Eat plans by the government. Catch 22 situations. If we go out more for a dinner, hospitals suffer from less available beds.
Physical death vs. Economic death. If you don’t need to worry about your job, you are very very lucky.
Here are two lines which explain the market reaction to Covid 19. Interestingly, the first wave back in Feb, the market reacted too much. However, second-wave in August, the markets ignored the spread out.
Now, the third wave has a positive correlation,! The market is higher with more new infections. I think the market believes governments and central banks more than the virus.
【Daily new infections in Tokyo,bottom vs. Nikkei225, up】
Yield in US and Denmark
Decoupling of yield move is happening in North America and Europe. Japanese investors have heavy exposure in Danish Covered bonds that regulator announced new rules, which is favorable for bank’s tier1 count.
US yield is moving north, trying to touch 1.00% several times. On the other hand, Danish govvy yield is moving lower.
We saw the opposite reaction during the initial breakout in March. It seems to me that Europe and maybe Japan are slower to get out.
The US has massive sacrifices in the pandemic, but economy and corporates are doing better, which is strange to me.
【US government bond 10 years yield in purple vs. Denmark 10 in blue】