Mrs Watanabe piles into Australian dollars

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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). ATT00002 ATT00001
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.