While the BOJ has ruled out buying foreign bonds (and so weakening the yen) institutional investors have indicated they may do so. Market attention has swung to examining these plans, and the market is hungry for information.
I highlighted a Wall Street Journal story yesterday on how we’re expecting to see investment allocation plans from Japanese life insurers this week. Nippon Life kicked it off on Monday, saying it ‘may’ begin to buy foreign bonds. No indication as to amounts was offered. All very vague – hardly worth waiting for. (Scant details here at Reuters).
We expect more talk on Wednesday, with announcements expected from Meiji Yasuda Life Insurance Co. and Sumitomo Life Insurance Co. Then Thursday brings the regular report on flow of funds into and out of foreign bonds and stocks, and Japanese bonds and stocks (these figures showing net Japanese selling of foreign securities on the 11th of April were a precipitating factor in the yen buying that turned into a bit of a rout late that week and early the next) . The market will be watching all of these.