Blue chips just got riskier

With the Trans-Pacific Partnership (TPP) deal hogging the headlines, another transnational deal has largely gone unnoticed, says John Stepek. But it will have big implications for your portfolio.

A huge new trade deal the Trans-Pacific Partnership (TPP) grabbed headlines this week, as America and various Asian and Latin American nations finally signed on the dotted line after five years of back-and-forthing. Now, we're all for free trade and the abolition of tariffs, and while the details of these deals usually reveal all sorts of loopholes and cop-outs and nods to special interests in one country or another, there's enough there for us to like the look of in terms of what positives there might be for one of our favourite markets Japan.

Any deal that can loosen the grip of the agricultural lobby "could have a significant effect on Japan", which provides more taxpayer support to its farmers than pretty much any other wealthy country, notes Jonathan Allum of SMBC Nikko Capital Markets. Of course, the deal still needs to be ratified by the individual countries (although America and Japan are the most important signatories), so it's likely to be a while before any impact becomes apparent.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.