Japanese market flight to defensives is potentially an early indicator of trouble ahead in U.S. and global markets.
U.S. defensives don’t show a similar pattern yet, but definitely a thing to keep an eye on.
Concerns that the global economy may peak, uncertainties over President Donald Trump’s policies and the yen’s appreciation against the dollar earlier this year have contributed to the rally in Japanese defensives, according to Hiroshi Matsumoto, head of Japan investment at Pictet Asset Management Ltd.