JPY: Flow data indicate continued foreign investor selling - MUFG

Derek Halpenny, European Head of GMR at MUFG, suggests that the monetary easing action by the BoJ on 29th July does not appear to have had much immediate impact on investor sentiment.

Key Quotes

“Foreign investors were net sellers of Japanese equities for the third consecutive week last week selling JPY 492.2bn, which in fact was the largest one-week total since the week ending 18th March. Of course the period covers the immediate week after the BoJ’s policy easing and perhaps is more a reflection of the disappointment of the easing announced and the equity markets in Japan did rebound this week, so we may well see in next week’s data that foreign investor appetite improved this week. 

But the bigger picture remains the same – that is that foreign investors are losing faith in Abenomics. The weekly data shows that this fiscal year to date, foreign investors have bought just JPY 180bn worth of Japanese equities. In the same period last fiscal year, foreign investors bought JPY 4.4trn worth of Japanese equities. As long as faith in Abenomics remains as low as it is now, the scope for a sustained rebound in USD/JPY will remain limited.”