JPY: Japanese investors were again large net sellers of foreign bonds – RBC CM

Analysts at RBC Capital Markets note that the MoF’s weekly capital flows data showed that Japanese investors were again large net sellers of foreign bonds in the week to last Friday (JPY0.5trn).

Key Quotes

“The failure of demand for overseas bonds to pick up means that post-US election JPY weakness is largely a speculative phenomenon. Despite the material pullback in USD/JPY from the highs, our aggregate USD/JPY positioning indicator is not showing any significant lightening up of long USD/JPY exposure, which suggests that the pair is still vulnerable to the downside. December CPI data are due tonight and should show no change in trend on the BoJ’s favoured measure (ex-fresh food; consensus -0.3% y/y).”