Nomura note that "for Japanese investors,.....>

JAPAN: Nomura note that "for Japanese investors, FX hedge costs for USD

investment have risen further from a year ago, and if we see the same seasonal

pattern of more foreign bond purchases supported by the fundamental recovery,

the FX impact could be larger this time. Japanese investors may still prefer

hedged EGBs, as the near-term risk of an ECB rate hike has disappeared with the

introduction of new forward guidance by the ECB. For unhedged US bond

investment, investors are still likely to wait for an opportunity to dip buy.

Nonetheless, the seasonal pattern and recent fall in global fixed income

volatility suggest a high possibility of active investment by Japanese

investors, which would support yen-crosses."