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USD/JPY Aggressive profit-taking in toshin market – Nomura

FXStreet (Barcelona) - Research Analysts at Nomura note Retail investors selling foreign securities aggressively via toshins last week.

Key Quotes

“They sold JPY195bn ($1.7bn) of foreign securities via toshins, the biggest weekly net selling since end-December 2013, when they took profits aggressively before the hike in the capital gains tax and the introduction of the NISA. Their selling of foreign securities was especially strong on 7 November, recording the biggest daily selling ever (- JPY177bn or -$1.5bn). Retail investors sold domestic assets aggressively via toshins last week, to the tune of JPY464bn ($4.0bn), the biggest weekly net selling.”

“Nonetheless, the rate of JPY depreciation after the BOJ easing and the GPIF announcement are likely to have exceeded their expectations, and retail investors are likely to take profits aggressively.”

“These suggest retail investors have not been participating in the latest USD/JPY rally, both in toshin and margin trading markets, while they are more likely to have reduced their JPY selling exposure.”

“In the short term, their investment momentum may remain weak, because of the magnitude of the recent JPY weakness. However, risk appetite among retail investors has been gradually improving, and we expect their foreign investment to recover relatively soon.”

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