Japan: Demand for foreign assets near record levels – Westpac

Robert Rennie, Research Analyst at Westpac, suggests that historically, we have tended to see Japanese demand for foreign assets soften into financial year end.

Key Quotes

“However, this end of year looks to be an exception. Rather than signs of softening, demand looks like it is accelerating. Using weekly MOF data as the source, Japanese investors bought ¥12.02 trillion (approx. $107bn) of foreign assets in the March quarter. That would be close to the record set back in 2010.

Demand for foreign bonds in this last quarter hit ¥9.27tn, a fresh high back to October 2010. More central bank QE drives more demand for high yielding assets around the world and with 10yr JGBs yielding -8bps, increased Japanese buying of A$ assets should be expected in the new Japanese financial year beginning April 1.”