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from Global Investing:

After disappointing start to 2013, how will hedge funds catch up?

Despite the early-year rally in equity markets, some hedge funds seem to have had a disappointing start... yet again.

JP Morgan notes that the industry's benchmark HFRI index was up 2.8% by end-February,  well below the 4.6% for MSCI All-Country index.

Some 4.2 percent of hedge funds suffered losses of at least 5% in the first two months of year, compared with 3.3% in the same period in 2012. Still, this is better than 2008/2009, when losses of this magnitude were seen at more than one in five of hedge funds. According to JP Morgan:

In all, this performance picture is rather unexciting, raising the chance that hedge funds will add risk near term to chase the current momentum in equity markets. This performance chasing happened in each of the previous two years, with hedge funds raising their betas during March/April of 2011 or 2012.

from Breakingviews:

Abenomics can clear Japan’s demographic hurdle

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Japan has a serious demographic disadvantage: its population is both shrinking and ageing. But the situation is not so dismal - at least not yet - that it will wreck Prime Minister Shinzo Abe’s plans to revive the economy.

from Global Investing:

Abenomics rally: bubble or trend?

"Abenomics" is the buzzword in Japan these days -- it refers to Prime Minister Shinzo Abe's aggressive reflationary fiscal and monetary policies that triggered the yen's 10 percent decline against the dollar and 17 percent rally in Tokyo stocks this year.

So it's no wonder that the Japanese mutual fund market, the second largest in Asia-Pacific, enjoyed the largest monthly inflows in almost six years last month, raking in as much as $11 billion.

from Photographers' Blog:

Destination Fukushima: Two years on

Fukushima, Japan

By Issei Kato

“Let’s put our hearts together and keep going, Fukushima!” reads a large banner that hangs across a large steel structure that stands next to the No. 4 reactor building at Tokyo Electric Power Co’s Fukushima nuclear power plant.

The plant was overwhelmed by a massive tsunami and earthquake two years ago, triggering hydrogen explosions and a nuclear meltdown.

from Ian Bremmer:

The top 10 grudges in the G-20

The G-20 is no happy family. Comprised of 19 countries and the European Union, once the urgency of the financial crisis waned, so too did the level of collaboration among members. Unlike the cozier G-7 -- filled with likeminded nations -- the G-20 is a better representation of the true global balance of power … and the tensions therein. So where are the deepest fault lines in the G-20? 

Below is a ranking* of the 10 worst bilateral relationships in the G20. Russia is in four of the worst, while China is in three (although Russia and China’s relationship is fine). Several countries are also in two of the worst relationships: the United States (with the two belligerents mentioned above), Japan, the UK and the EU. 

from Breakingviews:

BOJ chief could score early win by dumping rule

By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Expectations are running high for Japan’s next monetary czar. Haruhiko Kuroda, who has been nominated by the government as the Bank of Japan’s next governor, needs to quickly demonstrate his deflation-fighting credentials. One way would be to do away with the BOJ’s self-imposed limit on how many government bonds it can hold.

from The Edgy Optimist:

I think we’re turning Japanese, I really hope so

Why the U.S. would be lucky to become Japan.

By Zachary Karabell

Over the past few years, it’s become ever more common to hear comparisons between the United States and Japan. They are not favorable. They come in the form of dark warnings that the current policies of the United States will lead to a fate similar to Japan’s over the past 20 years: stagnant growth with no end in site.

Let’s just say for the moment that the United States is becoming Japan – a nation of little to no economic growth, high public debt and a broken financial system. How bad is that? Is becoming Japan really a worst-case scenario?

from Breakingviews:

Next BOJ chief should accept monetisation

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Bank of Japan has a morbid fear of directly financing fiscal deficits. But this “no monetisation” creed sits ill with the $1 trillion or so of public debt - roughly a fifth of the Japanese GDP and about 14 percent of the net outstanding public debt - which it has already turned into money. The next BOJ governor, who will take over when the incumbent Masaaki Shirakawa steps down on March 19, should be more realistic.

from Breakingviews:

Japan tensions rewrite China shopping lists

By Katrina Hamlin

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

China’s buying habits have taken on an air of the patriotic, at least where Japan is concerned. As tensions rose last year over who owns a group of remote islands, sales of Japanese cars and arrivals of Chinese tourists showed a marked slowdown. Even Chinese acquisitions of Japanese companies fell in the last quarter of 2012.

from Breakingviews:

G7 only adds to global currency confusion

By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The G7 has spoken about the troubled foreign exchange markets, and the world is marginally less secure for it. In Tuesday’s four-sentence statement, the finance ministers and central bankers of the world’s leading economies managed to ignore the problem of inadvertent competitive devaluations, contradict themselves and make an empty promise.

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