Japan Locals In No Hurry
Japanese investors were net sellers of foreign bonds again last week, according to official ‘hard data’ released overnight (Chart 1). The conclusion is inescapable − the BoJ’s bold easing initiative announced on April 4th has not yet triggered a tide of Japanese outflows abroad. We are not surprised. Most Japanese real money investors are still designing their investment strategies for the new fiscal year. These annual deliberations are lengthy even in normal times. Now though, investors have an additional complication to consider − how should a new era of policy accommodation be incorporated into investment planning, especially given ongoing turbulence in the JGB market? So expect some delays this year.
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UBS