Back
5 Jul 2013
Flash: Japanese net bond sellers seven weeks running – UBS
FXstreet.com (New York) - According to Research Analyst Gareth Berry at UBS, “Japanese investors were net sellers of foreign bonds again last week – that’s seven weeks in a row now.”
The net selling was quite heavy too, amounting to about US$9.6 billion, versus about US$11.5 billion the week before. This is certainly unusual given the annual habit of increasing foreign exposure early in the new fiscal year. Should yen bears be concerned by this? – not hugely.
“The lack of appetite for foreign bonds so far is a sensible reaction to an unusual sequence of events, the influence of which will eventually fade. Outflows were discouraged initially by increased JGB volatility in the weeks after the BoJ launched QQE. Given the circumstances, it was considered wise to wait until the dust settled at home before embarking on adventure overseas.” Berry notes.
The net selling was quite heavy too, amounting to about US$9.6 billion, versus about US$11.5 billion the week before. This is certainly unusual given the annual habit of increasing foreign exposure early in the new fiscal year. Should yen bears be concerned by this? – not hugely.
“The lack of appetite for foreign bonds so far is a sensible reaction to an unusual sequence of events, the influence of which will eventually fade. Outflows were discouraged initially by increased JGB volatility in the weeks after the BoJ launched QQE. Given the circumstances, it was considered wise to wait until the dust settled at home before embarking on adventure overseas.” Berry notes.