As we step into 2025, the global financial landscape remains dynamic, with critical shifts and lessons from the past year shaping the road ahead. Recent conversations with industry veterans Niels Kaastrup-Larsen, Dave Dredge, and Cem Karsan have provided a wealth of insights into the evolving markets, offering a lens through which investors can better understand current opportunities and challenges. Here, we summarize their discussions, focusing on themes such as the importance of positioning, the role of volatility, and the broader implications for global monetary systems.
Reflections on 2024: Lessons Learned
The panelists agree that 2024 was a pivotal year in multiple respects. One of the standout developments was the activity in Japan, including the Bank of Japan’s (BOJ) policy shifts. These moves, which included the first rate hikes in decades, catalyzed significant unwinding of yen carry trades and triggered broader market implications. Japanese equities experienced dramatic shifts, with a notable volatility event causing a 12% one-day drop in the Nikkei index.
Dave emphasized the relevance of Japan’s market dynamics, describing them as underappreciated globally. Despite their “super slow-motion” pace, these changes highlighted the fragility of the global monetary system, particularly in regions with deeply embedded pegs or structural imbalances.
Additionally,
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