International Investors Shed Japanese Assets Last Week

Net international security flows on the part of Japanese investors were limited last week, with the proximity to the end of the current Japanese financial year likely limiting wider activity.

• Elsewhere, foreign investors sold decent clips of Japanese bonds and equities last week. It may have been those that didn’t hedge their FX exposure pulling out of Japanese assets given the recent JPY weakness/fears of an extension of that move.
• In terms of specifics, some may have looked to exit long equity positions after the Nikkei 225’s bounce from the recent trough (although this was the 8^th consecutive week of net selling of Japanese equities by foreigners), while the net selling of Japanese bonds may have represented foreign investors looking to test the BoJ’s resolve when it comes to the enforcement of its 10-Year JGB yield trading band (although it came after 2 weeks of heavy net Japanese bond buying on the part of offshore investors).