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Offshore Investors Return To Local Stocks, Sell Local Bonds


Offshore investor flows were mixed in the week ending October 6. Inflows into Japan stocks rebounded, rising ¥1436.1bn. This follows modest inflows in the week prior and generally firm selling trends from mid August through to the later parts of September. In contrast, foreign investors resumed selling local bonds. We saw
-¥643.6bn in outflows last week.

  • Japan investors were modest purchasers of offshore bonds for the second straight week (¥183.4bn). We should get more details on lifer investment plans for the second half of the fiscal year next week. Foreign bond selling could remain part of the mix given unattractive (FX hedged) offshore returns (see this BBG link for more details).
  • Japan buying of foreign stocks cooled noticeably, although remained positive.

Table 1: Japan Weekly Investment Flows

Billion YenWeek ending October 6Prior Week
Foreign Buying Japan Stocks 1436.171
Foreign Buying Japan Bonds -643.625.8
Japan Buying Foreign Bonds183.4297.1
Japan Buying Foreign Stocks45.2721

Source: MNI - Market News/Bloomberg

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