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Flash: Why are Japanese investors selling foreign assets? - Brown Brothers Harriman

FXstreet.com (London) - Research teams at Brown Brothers Harriman think the sales are a way to repatriate what thus far is a relative small part of their overseas holdings.

They added that the sharp decline in the yen offers an attractive opportunity for the proverbial Mrs. Watanabe, who frankly is not getting any younger and may want to top up the funds available for retirement. The team explains that many exaggerated the enthusiasm that Japanese investors would have for foreign bonds, that were at near record high prices and of questionable quality (many have lost their AAA rating).

In addition, they said that the sell-off in JGBs and the increase in domestic interest rates may alter the calculus about investing in foreign bonds. Finally, they ask ‘And why should Japanese equity investors chase overseas returns when they have the best stock market going?’

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