Kuroda Flows Seek Belgian Bonds
Belgian and French bonds have been the key beneficiaries of yen outflows since the Bank of Japan unveiled its QQE policy in April. That’s the key message from portfolio flow data released last week by Japan’s Ministry of Finance. The data provide a geographical breakdown of where the outflows are headed, bringing us up to the end of June. Were these inflows euro supportive? Marginally in our view, but it’s a question of scale given more powerful forces were at work too. For example, this net buying of euro portfolio assets by Japanese investors during this three-month period was only a small fraction of the Eurozone trade surplus over that time.
Read the full report: UBS