Japanese Investor Flows
Danske Markets | Apr 19, 2013 04:14AM ET
A central market theme is what the spill-over effect of the aggressive Japanese QE program will be. It is still early days for the BoJ program, and it will take time before a clear pattern is established. Given the magnitude of BoJ intervention, we expect it to have a positive effect on the European government bond market in coming quarters.
Data released this week showed that Japanese investors continued to be net sellers of foreign bonds last week, but that the net sale decreased to JPY331bn from JPY1140bn the previous week. Japanese investor were net buyers of foreign bonds last year.
One explanation for the net sales of foreign bonds in Q1 13 could be the need to rebalance the portfolios ahead of the fiscal year-end. The weaker JPY implies that Japanese investors' funds (ceteris paribus) have increased the share of foreign securities in the investment portfolios .
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