From RBC Capital Markets:
- AUD (and NZD) have been the two best-performing G10 currencies in the past month. Japanese retail investor trends go a long way toward explaining the outperformance.
- Over the past several years, AUD had fallen out of favour as an issuance currency. In 2013, AUD denominated uridashis represented just 9.2% of total issuance, the lowest in years.
- But it seems the Japanese retail investor is returning to AUD once again, as AUD represents 14.2% of year-to-date issuance (Fig 1).
- Over the past month specifically, AUD has dominated as the currency of choice for uridashi issuance (ex JPY) with USD710mn issued. NZD comes a (distant) second at USD228mn (Fig 2).