JPY: Japanese investors were net buyers of foreign bonds – RBC CM

Adam Cole, Research Analyst at RBC Capital Markets, notes that the MoF’s weekly capital flows data showed that Japanese investors were net buyers of foreign bonds (JPY0.3trn) in the second week of January.

Key Quotes

“Net buying is small in a historical context and the broad trend remains that Japanese investors are selling foreign bonds, not buying as the price action in USD/JPY since the US election might imply. Since mid-November, Japanese investors have liquidated JPY2.2trn of foreign bond holdings, leaving positioning outside Japan as the main driver of JPY weakness. As we have argued before, this leaves USD/JPY prone to sharp corrections lower and will make further upside hard work.”