Investment Strategy

Where does Japan go from here?

Aug 9, 2024
Authors : Julia Wang, Cameron Chui, Yuxuan Tang, Weiheng Chen


In our view, the near-term risks from Japan’s policy normalization, the carry trade unwind and technical factors do not invalidate the structural investment thesis for Japanese equities. This unwinding could allow investors to focus more on market fundamentals over the medium to longer-term, on which we remain positive.

While yen strength and increased global economic uncertainty increases downside risks to the outlook, we view the selloff as being overdone relative to fundamentals. Many companies approached valuation multiples (on a price-to-book basis) last seen during the depths of COVID-19. We view the TOPIX at 2,200-2,300 as a level consistent with a near-recessionary environment and for investors to add exposure at these levels. We believe that the structural opportunity in Japan remains, in view of its more reflationary path and corporate governance changes in the years ahead.

On a longer time horizon, the yen still appears somewhat undervalued given interest rate differentials. With U.S. yields likely to decline with softening growth and a more aggressive Fed cutting cycle, we see the pair staying range-bound around current levels going into the end of the year and strengthen modestly by the middle of next year.

 

The Bank of Japan (BoJ) hiked its policy rate from 0.1% to 0.25% on July 31st, a move which surprised consensus expectations but was acknowledged as a risk by forecasters. What was perhaps less expected was the global market rout which ensued in the following days, at one point bringing USDJPY below 142 (from over 160 less than a month ago) and crashing Japanese equities nearly 25% from all-time highs (also less than a month ago), marking record single-day declines and volatility spikes. In what could already be a sign that policymakers are acknowledging the challenges of rate normalization, the BoJ’s Deputy Governor Shinichi Uchida recently stated that the central bank “will not raise its policy interest rate when financial and capital markets are unstable". As the BoJ takes on the challenge of sustaining Japan’s long-awaited reflation while normalizing decades of ultra-easy monetary policy, global positions that have been built up using borrowed yen, the fundamental macro risks of making such a structural shift, and technical market factors can continue to introduce volatility.

JAPAN’S EQUITY VOLATILITY SURGED TO SOME OF ITS HIGHEST LEVELS EVER AND THE MARKET LOST OVER A TRILLION DOLLARS IN VALUE

Source: Bloomberg Finance L.P. Data as of August 7, 2024.
The chart shows the Nikkei Volatility Index (left axis) and Japan Exchange Market Cap in USD trillions (right axis) from 2004 to 2024, demonstrating the inverse relationship between market volatility and market capitalization in Japan. During periods when the Nikkei VIX spikes, the Japan Exchange Market Cap often shows a decline during these volatility spikes, implying a market sell-off.

Even as markets have since pared some of those extreme moves, questions and concerns remain over Japan’s path from here. How much is left of the “carry trade” where investors borrowed the yen at low interest rates to invest into higher-yielding assets? Is the era of a weak yen and strong equity performance over?

In this week’s Asia Strategy Focus, we address those questions and update our views on Japan, with the perspective that fundamentals will likely dominate over the medium to longer-term, but positioning and technical factors could have an impact in the near-term. We reiterate our constructive outlook on Japan’s economy and markets even as risks remain.

First, what is a carry trade? Simply put, investors conduct a carry trade by borrowing in a low-interest rate currency (such as the yen or Swiss franc) and investing the funds in a higher-yielding currency (such as the U.S. dollar). The basic return from this trade is the difference in interest rates between the two currencies. Borrowing in yen to fund investments in dollar assets such as U.S. stocks and bonds and Japanese equities (among many others) has been popular as global interest rates rose while Japan’s stayed firmly anchored at low levels.

However, things can unravel quickly. When the funding currency appreciates (which the borrower has a short position on), investors may be forced to sell their long positions to cover losses on their short positions. In this case, the yen has been steadily appreciating against the dollar since July 11th (when Japanese authorities intervened to prop up the currency) and its strength accelerated after the BoJ’s rate hike on July 31st. As investors covered losses on their short yen positions (by buying yen) it pushed the currency higher, creating a feedback-loop. But it wasn’t just the currency – many participants invested their borrowed yen into equities as well. Those leveraged investors sold other assets (such as U.S. or Japanese equities) to cover their yen losses too. The selloff in equities also intensified the negative feedback loop.

So naturally the next question is how much of the carry trade has been unwound, and how much is left? Unfortunately, there is no definitive answer as currency transactions aren’t tracked centrally on an exchange. Estimates range from $20 trillion (courtesy of Deutsche Bank, making the case that the consolidated balance sheet of the Japanese government and related entities are engaged in a massive carry trade) to $1 trillion based on Japanese banks’ foreign lending.

In terms of estimating how much of the trade has been unwound, some strategists including those from J.P. Morgan Investment Bank are pointing to around 50% based on speculative yen short positions. The latest data on speculative yen shorts is as of end-July, and the most recent week’s activity suggests the unwinding could be even larger.

SPECULATIVE YEN SHORT POSITIONS HAVE STARTED UNWINDING

Source: Commodity Futures Trading Commission (CFTC), Chicago Mercantile Exchange (CME), Bloomberg Finance L.P. Data as of July 30, 2024.
The chart plots the Commodity Futures Trading Commission (CFTC) Chicago Mercantile Exchange (CME) JPY short positions (left) against the USDJPY exchange rate (right), illustrating the correlation between speculative short positions on JPY and USDJPY. When JPY short positions increased from 72241 in January 2023 to 158021 in November 2023, USDJPY increased from 132.08 in January 2023 to 149.63 in November 2023. This was followed by a fall in JPY short positions to 92889 in December 2023 and during the same period, USDJPY fell to 141.04. From December 2023 to June 2024, JPY short positions have been on a steady uptrend, increasing from 92889 in December 2023 to 208476. USDJPY increased from 141.04 in December 2023 to 160.88 in June 2024. In July 2024, speculative JPY short positions started to unwind, falling from 220937 in the start of the month to 138476 by the end of the month. USDJPY plunged from a peak of 160.88 to 146.53 as of July 30, 2024.

In terms of equity flows, J.P. Morgan Investment Bank estimates that most of the year-to-date net buying of Japanese equities have been reset and long positions added by foreign investors over the past 15 months have been almost entirely unwound. This sets Japan up favorably from a positioning perspective and further highlights the likelihood that the selloff was overdone.

Whatever the ultimate magnitude of the carry trade is, it appears unlikely that the full extent of the unwinding has been realized, meaning the risk of further spikes in volatility remains should fundamental pressures continue to drive USDJPY sharply lower and result in more capitulation. However, as markets stabilize, carry investors would be unlikely to reestablish their positions with the same magnitude as before given the rising risks of a U.S. macro slowdown and narrowing of rate differentials relative to Japan, which is still the key fundamental driver of the currency pair over the longer-term.

As for where we see the yen going, fundamental drivers are likely to reassert themselves as the key driver in the wake of the carry trade washout. USDJPY overshot fundamentals implied by U.S. Treasury yields in last couple of months, but the recent moves have wiped out the so-called “carry trade premium” and brought levels more in-line with fundamentals. Volatility is likely to remain a risk as these carry trades may not have been fully unwound, but any significant overshoots in yen strength beyond fundamentals could be opportunities to establish hedges which are still providing ~4% of carry to investors.

USDJPY CORRELATION WITH RATE DIFFERENTIALS MAY COME BACK

USDJPY vs model implied level

Source: J.P. Morgan Private Bank, Bloomberg Finance L.P. Data as of August 7, 2024. UST = U.S. Treasuries. 
This line chart shows the relationship between the USDJPY exchange rate and the fair value implied by the model (based on rate differentials). Historically, the two metrics have followed each other. From May 2024 to early July 2024, there was a break from historical trends as there was a growing divergence between the USDJPY exchange rate vs model implied level. USDJPY exchange rate increased from 152 in May 2024 to a peak of 161 as of July 10, 2024, above the model implied level which fell from 153 to 148 during the same period. This suggests that USDJPY overshot fundamentals implied by interest rate differentials, but the recent moves have wiped out the “carry trade premium” and brought levels more in-line with fundamentals. USDJPY fell from 161 as of July 10, 2024 to 144 as of August 6, 2024 closing the gap premium, and is now trading closely to its fair value of 142 as of August 6. 2024.
On a longer time horizon, the yen still appears somewhat undervalued given interest rate differentials. With U.S. yields likely to decline with softening growth and a more aggressive Fed cutting cycle, we see the pair staying range-bound around current levels going into the end of the year and strengthen modestly by the middle of next year. Unless the U.S. macro outlook deteriorates meaningfully (which we are not expecting), we are unlikely to see further bouts of extreme yen strength.

JPY STILL LOOKS UNDERVALUED OVER A LONGER TIME HORIZON

USDJPY vs USD-JGB 10-year interest rate differentials, %

Source: J.P. Morgan Private Bank, Bloomberg Finance L.P. Data as of August 7, 2024. Today refers to August 7, 2024. 
The scatter-plot displays the correlation between the 10-year UST-JGB spread (difference in interest rates between 10-year US Treasury bonds and 10-year Japanese Government Bonds) and the USDJPY exchange rate. Each dot on the chart represents a data point, indicating the values of both variables at a specific time. The dots generally form a pattern that slopes upward from left to right, suggesting a positive correlation between the two variables. The means that as the 10-year UST-JGB spread widens (higher US interest rates relative to Japanese rates), then USDJPY exchange rate tends to rise which represents a stronger US dollar against the yen. The orange dot on the chart titled “Today” represents the 10-year UST-JGB spread and USDJPY on August 7, 2024, 10-year UST-JGB spread and USDJPY was 3% and 146.67 respectively. Dots above the dotted line suggests that JPY is undervalued while dots below the dotted line suggests that JPY is overvalued. As of August 7, 2024, JPY still looks undervalued over a longer time horizon.

Japan remains our favored equity market in Asia and one of our preferred markets globally. Corporate Japan has been in good health with earnings tracking +12% YoY this quarter, and no meaningful signs of a deterioration in the outlook. Ongoing structural changes in the macro environment based on sustainable reflation mean that Japan’s equity market valuations have favorable re-rating potential.

Whilst the recent yen strength and increased global economic uncertainty increases downside risks to the outlook, we view the recent selloff as being overdone relative to fundamentals. Many companies approached valuation multiples (on a price-to-book basis) last seen during the depths of COVID-19. We view the TOPIX at 2,200-2,300 as a level consistent with a near-recessionary environment and for investors to increase exposure at those levels. We believe that the structural opportunity in Japan remains, in view of its more reflationary path and corporate governance changes in the years ahead.

While volatility is likely to remain in the market, we are at attractive price levels to consider legging into Japanese equities or using derivatives with meaningful upside participation while incorporating downside hedging. On a multi-month and multi-year basis, we expect the equity market to be higher. Some sectors which look especially attractive at the moment are companies domestically oriented with minimal foreign currency exposure; and export-oriented names trading near recessionary valuations. 

Over the longer-term, we continue to see opportunities in Financials (on continued reflation), Consumer Discretionary (on a consumption recovery led by higher wage growth), Technology (on AI-related beneficiaries such as in semiconductors), Industrials (on a bottoming global manufacturing cycle) and Real Estate (on upside from asset revaluation, sales and higher rents).

The negative impact of a stronger yen on equities was apparent in the selloff. Japanese equity investors are rightfully concerned about the traditionally inverse relationship between the two. Any further strength from current levels will likely remain a headwind for Japanese export-oriented corporate earnings.

Another key risk which has been introduced to the market suddenly is that of a slower than expected U.S. economy. July employment data showed the U.S. labor market weakening faster than expectations, which raised recession concerns. Confidence in a soft landing had become such an overwhelming consensus view by the middle of this year that financial markets were not positioned for any disappointments. This current ‘growth scare’ we are witnessing in the U.S. will likely be negative for Japan’s manufacturing-led economy and could weigh on valuation multiples for more cyclical markets like Japan until we get more clarity on the extent of the slowdown.

Taken together and barring any offsetting changes, these risks would likely further moderate the upside for the TOPIX.

The other risk is how the BoJ manages monetary policy going forward and whether they could prematurely choke off Japan’s reflation progress by tightening too quickly. In addition, the negative impact of non-consensus policy moves on the market (evidenced by the selloff) could result in second-order effects of a loss of confidence and drag on consumption and investment, a risk acknowledged by policymakers. While in retrospect the BoJ’s rate hike in July appears to have done more damage than good to the market, it was mostly due to poor timing, unclear communication, and unpredictability. A structurally more reflationary Japan can live with a higher interest rate, so long as rate increases are well-paced, clearly communicated, and happen in a gradual way. In a way, the sharp strengthening of the yen has also done the heavy lifting for the BoJ in terms of addressing the growing social and political dissatisfaction with persistent currency weakness, with markets expecting almost no hikes for the rest of the year.

MARKETS HAVE PRICED OUT ANY SUBSTANTIAL RATE INCREASES FROM THE BOJ THIS YEAR AFTER THE SELLOFF

Implied policy rate based on OIS futures, %

Source: Bloomberg Finance L.P. Data as of August 7, 2024. OIS = Overnight Indexed Swaps.
The chart plots the implied policy rate based on Overnight Indexed Swaps (OIS) from August 2024 to June 2025. The grey line represents the implied policy rates as of August 2, 2024 while the blue line represents the implied policy rates as of August 7, 2024. As of August 2, 2024, implied policy rates were expected to increase from 0.227% in August 7, 2024 to 0.33% in December 2024. However, markets have priced out any substantial rate increases from the Bank of Japan this year after the recent sell-off. As of August 7, 2024, implied policy rates are expected to increase at a more gradual pace from 0.227% in August 7, 2024 to 0.294% in December 2024.
In our view, these risks do not invalidate the structural investment thesis for Japanese equities (as we have outlined here, here and here). While near-term worries over the carry trade could continue to introduce market volatility, this unwinding could allow investors to focus more on market fundamentals over the medium to longer-term, on which we remain positive.

All market and economic data as of August 8, 2024 and sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.

For illustrative purposes only. Estimates, forecasts and comparisons are as of the dates stated in the material.

There can be no assurance that any or all of these professionals will remain with the firm or that past performance or success of any such professional serves as an indicator of the portfolio’s success.

We believe the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice.

This document may also have been made available in a different language, at the recipient’s request, and for convenience only. Notwithstanding the provision of a convenience copy, the recipient re-confirms that he/she/they are fully conversant and has full comprehension of the English language. In the event of any inconsistency between such English language original and the translation, including without limitation in relation to the construction, meaning or interpretation thereof, the English language original shall prevail.

This information is provided for informational purposes only. We believe the information contained in this video to be reliable; however we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of the use of any information in this video. The views expressed herein are those of the speakers and may differ from those of other J.P. Morgan employees, and are subject to change without notice. Nothing in this video is intended to constitute a representation that any product or strategy is suitable for you. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees to you. You should consult your independent professional advisors concerning accounting, legal or tax matters. Contact your J.P. Morgan team for additional information and guidance concerning your personal investment goals.

Indices are not investment products and may not be considered for investment.

We are not recommending the use of benchmarks as a tool for performance analysis purposes.  The benchmarks used in this report are for your reference only.

For illustrative purposes only. This does not reflect the performance of any specific investment scenario and does not take into account various other factors which may impact actual performance.

Past performance is not a guarantee of future results.  It is not possible to invest directly in an index.

The information presented is not intended to be making value judgments on the preferred outcome of any government decision or political election.

All companies referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by J.P. Morgan in this context.

International investments may not be suitable for all investors. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Some overseas markets may not be as politically and economically stable as the United States and other nations. Investments in international markets can be more volatile.​

Holders of foreign securities can be subject to foreign exchange risk, exchange-rate risk and currency risk, as exchange rates fluctuate between an investment’s foreign currency and the investment holder’s domestic currency. Conversely, it is possible to benefit from favorable foreign exchange fluctuations.

RISK CONSIDERATIONS 

  • Past performance is not indicative of future results. You may not invest directly in an index. 
  • The prices and rates of return are indicative as they may vary over time based on market conditions. 
  • Additional risk considerations exist for all strategies. 
  • The information provided herein is not intended as a recommendation of or an offer or solicitation to purchase or sell any investment product or service. 
  • Opinions expressed herein may differ from the opinions expressed by other areas of J.P. Morgan. This material should not be regarded as investment research or a J.P. Morgan investment research report.

Index definitions

The Nikkei Stock Average Volatility Index is calculated by using prices of Nikkei 225 futures and Nikkei 225 options on the Osaka Securities Exchange.

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

*Required Fields

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

Enter your First Name

> or < are not allowed

Only 40 characters allowed

Enter your Last Name

> or < are not allowed

Only 40 characters allowed

Select your country of residence

Enter valid street address

> or < are not allowed

Only 150 characters allowed

Enter your city

> or < are not allowed

Only 35 characters allowed

Select your state

> or < are not allowed

Enter your ZIP code

Please enter a valid zipcode

> or < are not allowed

Only 10 characters allowed

Enter your postal code

Please enter a valid zipcode

> or < are not allowed

Only 10 characters allowed

Enter your country code

Enter your country code

> or < are not allowed

Enter your phone number

Phone number must consist of 10 numbers

Please enter a valid phone number

> or < are not allowed

Only 15 characters allowed

Enter your phone number

Please enter a valid phone number

> or < are not allowed

Only 15 characters allowed

Tell Us More About You

0/1000

Only 1000 characters allowed

> or < are not allowed

Checkbox is not selected

Your Recent History

Important Information

Key Risks

In discussion of options and other strategies, results and risks are based solely on hypothetical examples cited; actual results and risks will vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related products in general, as well as the products or strategies discussed herein are suitable to their needs. In actual transactions, the client’s counterparty for OTC derivatives applications is JPMorgan Chase Bank, N.A. and its affiliates. For a copy of the “Characteristics and Risks of Standardized Options” booklet, please contact your J.P. Morgan Advisor.

May not address risks associated with investment in foreign currency denominated investments; 

This material is for information purposes only, and may inform you of certain products and services offered by private banking businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.

GENERAL RISKS & CONSIDERATIONS

Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

NON-RELIANCE

Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/ reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

Structured product involves derivatives. Do not invest in it unless you fully understand and are willing to assume the risks associated with it.  The most common risks include, but are not limited to, risk of adverse or unanticipated market developments, issuer credit quality risk, risk of lack of uniform standard pricing, risk of adverse events involving any underlying reference obligations, risk of high volatility, risk of illiquidity/little to no secondary market, and conflicts of interest. Before investing in a structured product, investors should review the accompanying offering document, prospectus or prospectus supplement to understand the actual terms and key risks associated with the each individual structured product. Any payments on a structured product are subject to the credit risk of the issuer and/or guarantor. Investors may lose their entire investment, i.e., incur an unlimited loss. The risks listed above are not complete. For a more comprehensive list of the risks involved with this particular product, please speak to your J.P. Morgan representative. If you are in any doubt about the risks involved in the product, you may clarify with the intermediary or seek independent professional advice.

Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, “J.P. Morgan”) have an actual or perceived economic or other incentive in its management of our clients’ portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client’s account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client’s portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account.

Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio's investment objective.

As a general matter, we prefer J.P. Morgan managed strategies. We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as, for example, cash and high-quality fixed income, subject to applicable law and any account-specific considerations.

While our internally managed strategies generally align well with our forward-looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios

The Six Circles Funds are U.S.-registered mutual funds managed by J.P. Morgan and sub-advised by third parties. Although considered internally managed strategies, JPMC does not retain a fee for fund management or other fund services.

In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

JPMorgan Chase Bank, N.A. and its affiliates (collectively “JPMCB”) offer investment products, which may include bank managed investment accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC (“JPMS”), a member of FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPM. Products not available in all states.

In Germany, this material is issued by J.P. Morgan SE, with its registered office at  Taunustor 1 (TaunusTurm), 60310 Frankfurt am Main, Germany, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB).   In Luxembourg, this material is issued by J.P. Morgan SE – Luxembourg Branch, with registered office at European Bank and Business Centre, 6 route de Treves, L-2633, Senningerberg, Luxembourg, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Luxembourg Branch is also supervised by the Commission de Surveillance du    Secteur Financier (CSSF); registered under R.C.S Luxembourg B255938. In the United Kingdom, this material is issued by J.P. Morgan SE – London Branch, registered office     at 25 Bank Street, Canary Wharf, London E14 5JP, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – London Branch is also supervised by the Financial Conduct Authority and Prudential Regulation Authority. In Spain, this material is distributed by J.P. Morgan SE, Sucursal        en España, with registered office at Paseo de la Castellana, 31, 28046 Madrid, Spain, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE, Sucursal en España is also supervised by the Spanish Securities Market Commission (CNMV); registered with Bank of Spain as a branch of J.P. Morgan SE under code 1567. In Italy, this material is distributed by J.P. Morgan SE – Milan Branch, with its registered office at Via Cordusio, n.3, Milan 20123,  Italy, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Milan Branch is also supervised by Bank  of Italy and the Commissione Nazionale per le Società e la Borsa (CONSOB); registered with Bank of Italy as a branch of J.P. Morgan SE under code 8076; Milan Chamber of Commerce Registered Number: REA MI 2536325. In the Netherlands, this material is distributed by  J.P. Morgan SE – Amsterdam Branch, with registered office at World Trade Centre, Tower B, Strawinskylaan 1135, 1077 XX, Amsterdam, The Netherlands, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Amsterdam Branch is also supervised by De Nederlandsche Bank (DNB) and the Autoriteit Financiële Markten (AFM) in the Netherlands. Registered with the Kamer van Koophandel as a branch of J.P. Morgan SE under registration number 72610220. In Denmark, this material is distributed by J.P. Morgan SE – Copenhagen Branch, filial af J.P. Morgan SE, Tyskland, with registered office at Kalvebod Brygge 39-41, 1560 København V, Denmark, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Copenhagen Branch, filial af J.P. Morgan SE, Tyskland is also supervised by Finanstilsynet (Danish FSA) and is registered with Finanstilsynet as a branch of J.P. Morgan SE under code 29010. In Sweden, this material is distributed by J.P. Morgan SE – Stockholm Bankfilial, with registered office at Hamngatan 15, Stockholm, 11147, Sweden, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Stockholm Bankfilial is also supervised by Finansinspektionen (Swedish FSA); registered with Finansinspektionen as a branch of J.P. Morgan SE. In Belgium, this material is distributed by J.P. Morgan SE – Brussels Branch with registered office at 35 Boulevard du Régent, 1000, Brussels, Belgium, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB);  J.P. Morgan SE Brussels Branch is also supervised by the National Bank of Belgium (NBB) and the Financial Services and Markets Authority (FSMA) in Belgium; registered with the NBB under registration number 0715.622.844. In Greece, this material is distributed by J.P. Morgan SE – Athens Branch, with its registered office at 3 Haritos Street, Athens, 10675, Greece, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Athens Branch is also supervised by Bank of Greece; registered with Bank of Greece as a branch of J.P. Morgan SE under code 124; Athens Chamber of Commerce Registered Number 158683760001; VAT Number 99676577. In France, this material is distributed by J.P. Morgan SE – Paris Branch, with its registered office at 14, Place Vendome 75001 Paris, France, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB) under code 842 422 972; J.P. Morgan SE – Paris Branch is also supervised by the French banking authorities the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Autorité des Marchés Financiers (AMF). In Switzerland, this material is distributed by J.P. Morgan (Suisse) SA, with registered address at rue du Rhône, 35, 1204, Geneva, Switzerland, which is authorised and supervised by the Swiss Financial Market Supervisory Authority (FINMA) as a bank and a securities dealer in Switzerland.

In Hong Kong, this material is distributed by JPMCB, Hong Kong branch. JPMCB, Hong Kong branch is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission of Hong Kong. In Hong Kong, we will cease to use your personal data for our marketing purposes without charge if you so request. In Singapore, this material is distributed by JPMCB, Singapore branch. JPMCB, Singapore branch is regulated by the Monetary Authority of Singapore. Dealing and advisory services and discretionary investment management services are provided to you by JPMCB, Hong Kong/Singapore branch (as notified to you). Banking and custody services are provided to you by JPMCB Singapore Branch. The contents of this document have not been reviewed by any regulatory authority in Hong Kong, Singapore or any other jurisdictions. You are advised to exercise caution in relation to this document. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. For materials which constitute product advertisement under the Securities and Futures Act and the Financial Advisers Act, this advertisement has not been reviewed by the Monetary Authority of Singapore. JPMorgan Chase Bank, N.A., a national banking association chartered under the laws of the United States, and as a body corporate, its shareholder’s liability is limited.

With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. We may offer and/or sell to you securities or other financial instruments which may not be registered under, and are not the subject of a public offering under, the securities or other financial regulatory laws of your home country. Such securities or instruments are offered and/or sold to you on a private basis only. Any communication by us to you regarding such securities or instruments, including without limitation the delivery of a prospectus, term sheet or other offering document, is not intended by us as an offer to sell or a solicitation of an offer to buy any securities or instruments in any jurisdiction in which such an offer or a solicitation is unlawful. Furthermore, such securities or instruments may be subject to certain regulatory and/or contractual restrictions on subsequent transfer by you, and you are solely responsible for ascertaining and complying with such restrictions. To the extent this content makes reference to a fund, the Fund may not be publicly offered in any Latin American country, without previous registration of such fund´s securities in compliance with the laws of the corresponding jurisdiction.

References to “J.P. Morgan” are to JPM, its subsidiaries and affiliates worldwide. “J.P. Morgan Private Bank” is the brand name for the private banking business conducted by JPM. This material is intended for your personal use and should not be circulated to or used by any other person, or duplicated for non-personal use, without our permission. If you have any questions or no longer wish to receive these communications, please contact your J.P. Morgan team.

JPMorgan Chase Bank, N.A. (JPMCBNA) (ABN 43 074 112 011/AFS Licence No: 238367) is regulated by the Australian Securities and Investment Commission and the Australian Prudential Regulation Authority. Material provided by JPMCBNA in Australia is to “wholesale clients” only. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Corporations Act 2001 (Cth). Please inform us if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

JPMS is a registered foreign company (overseas) (ARBN 109293610) incorporated in Delaware, U.S.A. Under Australian financial services licensing requirements, carrying on a financial services business in Australia requires a financial service provider, such as J.P. Morgan Securities LLC (JPMS), to hold an Australian Financial Services Licence (AFSL), unless an exemption applies. JPMS is exempt from the requirement to hold an AFSL under the Corporations Act 2001 (Cth) (Act) in respect of financial services it provides to you, and is regulated by the SEC, FINRA and CFTC under US laws, which differ from Australian laws. Material provided by JPMS in Australia is to “wholesale clients” only. The information provided in this material is not intended to be, and must not be, distributed or passed on, directly or indirectly, to any other class of persons in Australia. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Act. Please inform us immediately if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

This material has not been prepared specifically for Australian investors. It:

  • may contain references to dollar amounts which are not Australian dollars;
  • may contain financial information which is not prepared in accordance with Australian law or practices;
  • may not address risks associated with investment in foreign currency denominated investments; and
  • does not address Australian tax issues.

© $$YEAR JPMorgan Chase & Co. All rights reserved.

LEARN MORE About Our Firm and Investment Professionals Through FINRA Brokercheck

 

To learn more about J.P. Morgan’s investment business, including our accounts, products and services, as well as our relationship with you, please review our J.P. Morgan Securities LLC Form CRS and Guide to Investment Services and Brokerage Products

 

JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB") offer investment products, which may include bank-managed accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

 

Please read the Legal Disclaimer for key important J.P. Morgan Private Bank information in conjunction with these pages.

INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

Bank deposit products, such as checking, savings and bank lending and related services are offered by JPMorgan Chase Bank, N.A. Member FDIC.

Not a commitment to lend. All extensions of credit are subject to credit approval.

Equal Housing Lender Icon