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4 May 2015
Japanese foreign portfolio investment continues – Nomura
FXStreet (Barcelona) - Yujiro Goto, Global FX Strategist at Nomura, notes that the appetite of Japanese investors for foreign securities continued for the 23rd straight week.
Key Quotes
“Japanese investors continued to purchase foreign securities last week, according to the MOF. They bought JPY170bn ($1.4bn) of foreign equities, for the 23rd week in a row, while purchasing foreign bonds to the tune of JPY185bn ($1.5bn).”
“Japanese investors were net buyers of foreign bonds for the third week in a row, after selling aggressively during the first two days of April. Banks are likely to have taken profits from foreign bond exposures at the beginning of the new fiscal year, but their selling of foreign bonds has likely slowed.”
“Major life insurance companies suggest a strong appetite for foreign bond investment this fiscal year, as yields remain low in Japan. While retail investors still prefer foreign equities to foreign bonds when purchasing toshins, lifers’ portfolio shift into foreign bonds is likely boosting Japanese investment in foreign bonds.”
“The FX hedge ratio of lifers’ foreign bond investment may be lower this fiscal year than in previous fiscal years, as hedging costs are expected to rise.”
Key Quotes
“Japanese investors continued to purchase foreign securities last week, according to the MOF. They bought JPY170bn ($1.4bn) of foreign equities, for the 23rd week in a row, while purchasing foreign bonds to the tune of JPY185bn ($1.5bn).”
“Japanese investors were net buyers of foreign bonds for the third week in a row, after selling aggressively during the first two days of April. Banks are likely to have taken profits from foreign bond exposures at the beginning of the new fiscal year, but their selling of foreign bonds has likely slowed.”
“Major life insurance companies suggest a strong appetite for foreign bond investment this fiscal year, as yields remain low in Japan. While retail investors still prefer foreign equities to foreign bonds when purchasing toshins, lifers’ portfolio shift into foreign bonds is likely boosting Japanese investment in foreign bonds.”
“The FX hedge ratio of lifers’ foreign bond investment may be lower this fiscal year than in previous fiscal years, as hedging costs are expected to rise.”