Retail Investors See Flat USD/JPY - Nomura
Research Team at Nomura, notes that according to the latest Nomura
Individual Investor Survey (4-5 April) retail investors’ views on the
Japanese equity market weakened for the third month in a row.
Key Quotes
“The
Nomura I-View Index, which shows retail investors' views on Japanese
equity prices over the next three months, fell to 35.4 in April from
45.6 in March, undercutting 50 for the second consecutive month. This is
the lowest level since July 2015. The March Eco-watcher survey on the
household activity-related future conditions DI also fell to 46.4 from
48.5 from February, suggesting retail investors’ risk sentiment has
worsened.
Japanese investors accelerated foreign investment via
toshins in March, but we judge a large part of the investment came from
financial institutions, which are struggling with low yields in Japan.
Foreign portfolio investment by retail investors is likely to stay
limited for the time being, while Japanese policy makers’ stimulus
efforts should gradually improve risk sentiment among households.
Expectations
for JPY weakness against USD have weakened among retail investors. The
share of retail investors expecting USD/JPY to depreciate over the next
three months increased to 50.1% from 49.4% in March. The reference level
has declined further to 111.51 from 113.71 in March, but retail
investors see USD/JPY remaining at a subdued level for the next few
months.
At the same time, retail investors’ preference for USD
among the major currencies has remained high. The preference DI for USD
fell to 33.6 in April from 32.8 in March, while the JPY preference DI
inched down to 26.0 from 30.0 during the same period. Once household
risk sentiment improves, USD is still likely to benefit the most. In
contrast, the popularity of the two EM currencies, CNY and BRL, remained
low.”
(Market News Provided by FXstreet)
