Japanese investors still playing it close to home

Japanese investors are still net sellers of foreign bonds despite Shinzo Abe's policy of aggressive fiscal stimulus, with the situation unlikely to change until inflation starts to climb, M&G's Mike Riddell has said.

Much was made at the beginning of the month of the release of data showing domestic investors were net buyers of foreign bonds totalling Y204bn in the week to 27 April, and Y310bn the week after. The expectation is that Japanese investors are now dumping domestic assets and piling into foreign debt and other asset classes en masse. However, Riddell (pictured) noted that, for all the noise, the latest data last week showed a net outflow of Y804bn, which more than made up for purchases in previous weeks. Indeed according to research produced by M&G, over a three-month moving average ...