JPY: Equity Flows Could Turn After Stimulus - Nomura
Research Team at Nomura, suggests that the recent equity flows are likely JPY positive, which could turn after stimulus.
Key Quotes
“Underperformance
of Japanese equities so far this year may have generated JPY buying
flows via hedging adjustments, though foreign investors have been
liquidating exposure to Japanese equities. It is important for Japanese
policymakers to break the vicious cycle between JPY appreciation and the
decline in Japanese equity prices.
At the same time, a recovery
in Japanese equity prices may cause large JPY selling flows going
forward, on top of already-elevated foreign portfolio investment by
Japanese investors, which would weaken JPY quickly.”
(Market News Provided by FXstreet)
