Japan: Foreign bond investment finally recovers - Nomura

Analysts at Nomura point out that Japanese investment in foreign bonds accelerated last week as Japanese investors bought JPY1821bn ($16.0bn) of foreign bonds, the biggest weekly net purchases since early July last year.

Key Quotes

“Japanese investors were also net buyers of foreign equities last week for the fourth week in a row (JPY273bn or $2.4bn). As French political risk has diminished, Japanese investment in foreign assets recovered as we expected.”

“Foreign investors’ purchases of Japanese equity continued last week. They bought JPY372bn ($3.3bn) of Japanese equities, for the seventh week in a row. The recent recovery in Japanese equity prices has likely increased JPY selling for their hedging, offsetting JPY buying demand from their new investments. It will be worth monitoring the sustainability of their Japanese equity investment after the renewed uncertainty in US politics. Foreign investors were also net buyers of both Japanese long-term bonds (JPY395bn or $3.5bn) and short-term debt securities (JPY435bn or $3.8bn).”