Forex Flash: Japanese real money enters the market finally – UBS

FXstreet.com (Barcelona) - Japanese investors were net buyers of foreign portfolio assets last week (and the week before too). This provides the first hard evidence of outflows since BoJ Governor Kuroda unveiled his bold monetary easing program on April 4th.

According to Research Analyst Gareth Berry at UBS, “Life insurers were amongst the biggest net buyers of overseas assets during the month of April. So despite turbulence in the JGB market there has been no delay to the annual migration abroad – yen bears can take comfort from this.”

Typically, lifers boost their foreign holdings throughout the first half of the fiscal year so outflows could continue for months to come. “Fresh yen selling from investment trusts (Toushins) seems likely as well, and other real money outflows could follow too if Kuroda succeeds in lowering JGB yields.” Berry adds.