Mrs Watanabe brings home the bacon

See the latest Australian dollar analysis here:

Macro Afternoon

Mrs Watanabe

One reason why Australian stocks and the dollar are struggling became a little clearer this morning. And it has little to do with Australia or US tapering. Japan released its weekly foreign stock and bond buying flows and the news is money is flooding home.

After last week’s  804 billion yen repatriation in bonds and 136 billion yen in stocks, this week we have 1.1 trillion yen in bonds and 104 billion for stocks.

It’s no wonder as well that the US dollar has suddenly reversed and is falling against the yen.

Abenomics seems a bit confused at this point. If rising inflation and yields is going to bring money home to invest in local bonds then the yen is going to rise.

David Llewellyn-Smith
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  1. Somewhere once I read that the bubble and collapse on the Osaka exchange (in 1907-08 ?) was the greatest the world has seen, either before or since. The Japanese love a punt as much as anyone.

  2. GunnamattaMEMBER

    Basically we have Japanese funds simply cashing windfall gains abroad generated by the slide in the yen, and pumping those into Japanese assets.

    Presumably at some point they will start to look out again when Japanese Government Bonds yield nothing and we have scope for a bounce back, or the JGB market simply blows up.

    • General Disarray

      Yep. Although buying JGBs does seem a very odd choice from a casual observers perspective. Maybe they’re seeing something we don’t?

  3. Alex Heyworth

    Maybe Mrs Watanabe has finally realised she can’t take it with her, and has decided to spend.

  4. Abe is trying to square the circle.

    Elipse? Oblong? Oval? Pancake?

    I wish I knew what shape he’s going to end up with..