I’m Zen from Japan. From April 2024, I’d like to publish my assets, income and expenditure once a month. Please enjoy watching the release of assets held by average Japanese. If you have any advice, please let me know!
Firstly, I introduce myself. It looks roughly like the following.
Age : completed master’s degree in 2021 (late 20s) Major : Chemical Engineering Occupation : Research and development job at a chemical manufacturer Income : Late 200,000 yen Investment policy : Focusing on index investment with NISA, and trying out various investments Target : Millionaire
Assets amount disclosure (Jul. 2024)
Total assets amount
Zen’s total assets in Jun. 2024 were 13,865,461 yen. (90,199 USD) The achievement rate to become a millionaire is 9%. I still have a long way to go before I reach my goal of becoming a millionaire.
The breakdown is as follows.
In terms of Japanese yen, all assets except Japanese stocks were down compared to last month, so the overall balance was -25,257 yen. On the other hand, in dollar terms, almost all assets were up compared to last month due to the strong yen. The overall balance was +3,561 USD.
Japanese stocks are in the black, but this month I purchased 100 shares (76,500 yen) of TORAY, so the gain is not that large.
Let’s check the breakdown of each financial asset.
Japanese stocks
The Japanese stocks held by Zen were +1,258 USD compared to last month. The trend of the Nikkei Average in dollar terms was as shown in the image below.
Charts provided by TradingView
As you can see from the trend, it had been rising steadily up until mid-July, but since mid-July it has started to trend downwards.
The main reasons are thought to be 1. A sharp drop in US stocks 2. The strong yen 3. Anticipation of an interest rate hike by the Bank of Japan I will briefly explain the above two points in the topics on US stocks and exchange rate.
Regarding the topic of Japanese stocks, the Bank of Japan will hold a monetary policy meeting on July 30-31, and one of the points of discussion is whether there will be an interest rake hike.
The tricky thing about stocks is that even if an interest rate hike is actually implemented, it is not only possible that the Nikkei Average will fall as a result of the hike, but it is also possible that stock prices will rise as all the news about it is released.
Personally, even though it is impossible to predict the impact of interest rate hike on Nikkei Average, I believe that if the yen continues to appreciate in the future, it will fall due to selling pressure from overseas investors. So at this stage I am thinking of holding off on additional purchases of Japanese stocks.
Also, this month I purchased 100 shares of TORAY (76,500 yen).
Toray is a basic materials manufacturer with origins as a rayon production company, and is well known for its products Heattech and AIRism, which were developed in collaboration with Uniqlo. Toray also has the largest global market share in carbon fiber, and its products are used in aircraft and sports.
I decided to purchase this stock because I believe that carbon fiber has infinite possibilities.
Investment trust (S&P500)
I have accumulated the following investment trusts using the new NISA investment limit. ・三菱UFJ-eMAXIS Slim 米国株式（S&P500） 33,333 yen ・三菱UFJ-eMAXIS Slim バランス（8資産均等型） 10,000 yen
The investment trust I held was +309 USD compared to last month. The additional reserve amount has been included in this month’s price, but even excluding that, the price has increased significantly.
The trend of S&P500 was as shown in the image below. The blue line is the value in Japanese yen terms, and the orange line is the value in dollar terms.
Charts provided by TradingView
Like Japanese stocks, US stocks were performing well until mid-July but then began a downward trend. The chart also shows the fluctuations of the S&P500 in US dollar terms (SPX), and we can see that the decline in yen-based valuations was greater than in dollar terms due to the strengthening of the yen.
One of the reasons for the fall in US stocks this time is thought to be financial results rather than interest rake hike. The financial results of automaker Tesla, among others, led to a large chain reaction fall in tech stocks.
As the cause of the decline was financial results, it is possible that the US economy has reached a turning point. In this situation, it will be interesting to see what policies and statements will be made at the FOMC meeting in July.
Bonds
As for bonds, I hold iShares Core U.S. Aggregate Bond Market ETF (AGG). The bonds I hold increased by +16 USD compared to last month. This month’s AGG trend was as shown in the image below.
Charts provided by TradingView
AGG’s share price in US dollar terms has risen this month, but the strong yen has resulted in a fall in the price in yen terms. It is often said that bond prices and interest rates have a seesaw relationship, so perhaps we are starting to anticipate an interest rate cut soon.
With interest rates expected to fall in the US, bonds are a good investment target, but since the appreciation of the yen could cause the yen’s value to fall by a greater amount than the price increase of AGG. So I’d like to refrain from purchasing additional bonds at this stage.
Exchange rate
This month’s USD/JPY trend was as shown in the image below.
Charts provided by TradingView
In a complete reversal from previous years, the yen has strengthened.
One of the reasons for this is the expectation of an interest rate hike by the Bank of Japan. On the 17th of this month, it was reported that Digital Minister Taro Kono and LDP Secretary-General Toshimitsu Motegi indicated that their intention to urge the Bank of Japan to raise interest rates, so it is highly likely that an interest rate hike will be implemented in the near future.
In the United States, FRB is also expected to cut interest rates by the end of the year, and as the interest rate gap between Japan and the US narrows, it is highly likely that the yen will strengthen.
Furthermore, the US presidential election is coming up in November. Because Mr. Trump would like to correct the high dollar, if he is elected, I think the yen will undoubtedly appreciate.
We don’t know who will win, but the shooting of former President Trump on July 13th is still fresh in our memory. Even after being shot, Mr. Trump quickly got up and raised his fist, which seemed to symbolize a “America”. Even as a Japanese person, I found that scene resonating, and it must have further stirred the hearts of the American people.
This month’s expenses
This month’s credit card payment amount was 73,951 yen (481 USD).
My biggest expense this month was travel costs to Tokyo. I went to hang out with friends in Tokyo, but since I live in a remote area, it cost a fair bit of money.
Still, experiences like traveling with friends are priceless, so I want to spend money on experiences while still saving.
Summary
The Japanese yen ratio is at 38%, so I was thinking about investing somewhere soon, but I feel that the yen may continue to appreciate and the US market may stagnate in the future, so I’d like to refrain from investing.
I believe that the future direction of the market will become clear at the FOMC and Bank of Japan meeting in July, so I am thinking of deciding on my future investment policy after looking at the results.
The above was the asset amount disclosed in Jul. 2024. We’re in the middle of summer and it’s hot every day. I got a feel for summer at the fireworks festival the other day, how about you? See you next month.
