OctaFX | OctaFX Forex Broker
Open trading account

Forex Flash: Tide of Japanese outflows abroad till to be seen - UBS

FXstreet.com (Barcelona) - As UBS strategist Gareth Berry reminds us after last Asian data, Japanese investors were net sellers of foreign bonds again last week, according to official 'hard data' released.

"The conclusion is inescapable - the BoJ's bold easing initiative announced on April 4th has not yet triggered a tide of Japanese outflows abroad" he explains.

Grteh adds: "These annual deliberations are lengthy even in normal times. Now though, investors have an additional complication to consider - how should a new era of policy accommodation be incorporated into investment planning, especially given ongoing turbulence in the JGB market? So expect some delays this year."

He also mentions that foreign holdings of Japanese bonds were only marginally trimmed by Y176bn last week, although highlights foreign holdings of Japanese government bonds and T-bills stand now at an astounding Y84 trn, so according to the strategist, "even a partial retreat from the JGB market by foreigners, were it to happen, could be severely detrimental to the yen..."

For now, "accelerated BoJ bond purchases offer a good reason for foreigners to stay put, but if this excessive JGB volatility continues, patience could run out at some point" Gareth adds.

Forex Flash: Reducing US current account thriough energy production is daunting – JPM

According to John Normand at JP Morgan's Global FX Strategy: “the arithmetic of reducing the US current account deficit through energy production is daunting,” the analyst says, arguing that “structural improvement in the US balance of payments must contend with the cyclical environment created by loose Fed policy during the next few years of fiscal tightening,” John concludes.
Read more Previous

Forex: EUR/USD reverses gains as concerns re-ignite risk asset selling

After closing at its highest level since late February the previous day, EUR/USD was unable to achieve any follow through and finished the New York session down 1.08% at 1.3035.
Read more Next
Start livechat