Why Asia Really Is Different This Time

There is an ever more distinct Asian financial cycle. Structural economic changes are altering the shape of the World economy, largely, in recognition of China’s increasingly dominant role. Policy-makers are responding. We do not mean by this the latest reactive moves by US President Trump, rather the longer-term strategic adjustments being implemented by Asian regional policy-makers. Foremost are the implied shift by Japan towards Yen-targeting and the suggestion that China has stopped building forex reserves. If we are correct, these moves prospectively represent the biggest policy changes in Asia for three-decades.