Japanese retail investors continued to invest in foreign securities via toshins – Nomura

FXStreet (Barcelona) – Toshin data suggests Japanese retail investors have continued to prefer foreign assets, with the weak JPY continuing to stimulate investment in the foreign securities, as noted by Research Analysts at Nomura.

Key Quotes

“Toshin companies bought a net JPY450bn ($3.6bn) in foreign securities. They bought foreign equities to the tune of JPY329bn ($2.6bn) and bought a net JPY119bn ($1.0bn) in foreign long-term bonds. They still prefer foreign equities to foreign bonds. This is the fifth-straight month that they have been net buyers of foreign equities and the fourth-straight month that they have been net buyers of foreign bonds.”

“The weak JPY and the strong US economic outlook should continue to stimulate households’ investment in foreign securities, in our view. In addition, consumer confidence has been recovering gradually, which supports risk-taking by retail investors. Indeed, the May Economy Watchers Survey, which is strongly correlated with toshin flows, reported that the household activity-related DI (outlook) was 54.3 in May, the fourth-straight month that the DI exceeded the neutral threshold of 50.”

“Consumer sentiment is recovering owing to (1) lower gasoline prices, (2) higher wages, (3) an improved employment environment, and (4) higher stock prices.”

“The latest Nomura Individual Investor Survey shows limited expectations for further appreciation in USD/JPY, but better economic sentiment among retail investors suggests dip-buying demand from retail investors will remain strong.”

Toshin data suggests Japanese retail investors have continued to prefer foreign assets, with the weak JPY continuing to stimulate investment in the foreign securities, as noted by Research Analysts at Nomura.

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