Hedge Fund Capstone Bets on Volatility From BOJ’s Outlier Policy
- US firm allocating more risk capital to Japan than ever before
- China provides more opportunities in long term, Britton says
This article is for subscribers only.
US hedge fund firm Capstone Investment Advisors said it’s allocated more risk capital to Japan than ever before, as the central bank’s decision to maintain negative interest rates creates uncertainties that may benefit its volatility trading strategy.
“Japan is taking a view that they are going to hold firm with their interest-rate policy, and that is a significant outlier when you compare it to the Federal Reserve, European Central Bank and the Bank of England,” Chief Executive Officer Paul Britton said in an interview in Tokyo. “So that just creates volatility as investors question what the BOJ is going to do.”