Japan: Data likely to suggest strong purchases of foreign bonds and equities - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the Japan releases securities flow data overnight that continue to show strong purchases of foreign bonds and equities from Japan.

Key Quotes

“In these risk-averse markets the Yen isn’t going to sell off, but endless appreciation isn’t consistent with these data. I still think that one big driver of the yen rally has been the outflow from Japanese equities by foreign investors, which results in yen hedges being unwound (i.e., in yen buying). That would suggest that once the haemorrhaging from the Nikkei is over, it will be time to go long USD/JPY again, though we’d also want to see US real yields head higher.”