This Is Where Paul Tudor Jones Is Eyeing His Next Big Bet in Markets
Paul Tudor Jones says his investing career has been like a boxing match.
Every day, he enters the ring against a tenacious opponent, the market. Most of the time, he’s studying his opposition, biding his time, and looking for an opportunity to strike. And when that time comes, he takes a big swing.
“Every now and then, you’ll have a great opening, and you take a big shot, and you may land one,” he told the “Invest Like The Best” podcast in an episode published April 28. “You have these incredible opportunities at times if you just sit and wait the whole time in the interim.”
A couple of recent examples of big swings he’s landed are his 2020 bet on bitcoin, and his short bet on short-term interest rates in 2022 amid the inflation flare-up.
Now, Tudor Jones says he’s eyeing up another potential uppercut: the Japanese yen, particularly relative to the US dollar.
Japan has around a $4.5 trillion net investment position in foreign assets, he said, with 60% of that being in the US, giving it a dollar liability. The yen’s value relative to the dollar has fallen by more than 50% since 2012. Over the last 12 months, it’s down 10.7%.
But the catalyst for a rebound in the currency, Tudor Jones said, is Japan’s newly elected prime minister, Sanae Takaichi. Takaichi has a pro-business, protectionist approach, which should boost the currency, he said.
“They just have this massive dollar liability, and all of a sudden we’ve now got the most dynamic leader in certainly half a century in Japan, who’s Japan first,” Tudor Jones said.
He pointed to the pound sterling and the US dollar jumping around 10% after similar-type leaders were elected in the UK and US, like Ronald Regan, Margaret Thatcher, and Donald Trump in his second term.
“You’re looking for something that’s underowned, undervalued, way out of whack, people have gotten complacent on it,” he said. “And then you’re looking for that catalytic moment.”
The Invesco CurrencyShares Japanese Yen Trust (FXY) is one way to gain exposure to the yen relative to the dollar.
