A number of hedge funds, including Brevan Howard Asset Management and Millennium Management, are ramping up their Japan-focused trading teams amid heightened volatility in global markets driven by economic shifts and changes in monetary policy.
The report cites unnamed sources as confirming that Tomoki Kondo joined Brevan Howard as a Portfolio Manager based in Singapore in August. Millennium meanwhile, has brought on Yasuhiro Hasegawa as a ixed-income Portfolio Manager, while Ryosuke Kaneda has taken up a role focusing on Japan rates at Capula Investment Management LLP, according to insiders and his LinkedIn profile.
Representatives for all three firms declined to comment.
The appointments come as diverging monetary policies across countries create fresh trading opportunities. The volatile movements in Japan’s stock, bond, and currency markets during July and August underscored the importance of skilled traders with experience navigating various market cycles.
In late July, the Bank of Japan raised interest rates for only the second time in 17 years and signalled the potential for further hikes, which spurred a sharp yen rebound against the dollar, as the unwinding of yen carry trades —–estimated to be worth trillions of dollars – gained momentum. The yen carry trade involves borrowing at low interest rates in Japan to invest in higher-yielding assets abroad.
The Japanese stock market faced a dramatic $1.1tn loss over the first three trading days of August, with the Topix index experiencing its largest collapse since 1959. Panicked investors sought refuge in Japanese government bonds, and weak US payroll data, combined with assurances from the Bank of Japan that further rate hikes were unlikely, led to a reversal of a popular hedge fund bet on rising Japanese interest rates. This caused the 10-year Japanese government bond yield to drop the most since 1999, as traders scrambled to cover short positions.
The turbulent market conditions prompted the departures of Senior Portfolio Managers Chiga Murayama and Yosuke Motegi from BlueCrest Capital Management after they incurred losses on Japanese government bond trades.
