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25 Mar 2013
Forex Flash: Foreign share in JGB market declines - Nomura
FXstreet.com (Barcelona) - Nomura strategist Yujiro Goto notes that according to the BoJ. foreign exposure to JGBs declined to JPY84trn as of end-December, from JPY86trn in September.
He comments that as a result, the foreign share in the JGB market has declined to 8.7% from 9.1% from the previous quarter. Further, he adds that foreign investment in the Japanese financial market has been shifting from fixed income products to equities recently, and thus, the decline is not surprising. He feels that foreign investors have been accumulating Japanese fixed income assets as demand for safety increases and as the economic outlook improves, a gradual slowdown in foreign investment in Japanese risk-free assets is reasonable to expect. He writes, “. We expect foreign investment to continue shifting from Japanese fixed-income products to equities for the time being.”
He comments that as a result, the foreign share in the JGB market has declined to 8.7% from 9.1% from the previous quarter. Further, he adds that foreign investment in the Japanese financial market has been shifting from fixed income products to equities recently, and thus, the decline is not surprising. He feels that foreign investors have been accumulating Japanese fixed income assets as demand for safety increases and as the economic outlook improves, a gradual slowdown in foreign investment in Japanese risk-free assets is reasonable to expect. He writes, “. We expect foreign investment to continue shifting from Japanese fixed-income products to equities for the time being.”