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What have the Japanese been Buying ?

Marc To Market's picture


With the balance of payments data released early today, Japan also reported a country breakdown of its portfolio investment flows.  Japanese investors stepped up their capital outflows in October to JPY1.324 trillion  or about $13.3 bln from JPY952 bln in September. 

Recall that, confounding expectations, Japanese investors were net sellers of foreign assets from January through June.  They repatriated roughly $150 bln.  In four months for which there is now data, Japanese investors have bought almost $55 bln of foreign stocks and bonds. 

Japanese investors bought JPY1.452 trillion of foreign bonds in October after JPY1.385 trillion in September.  Although the amount was broadly similar, the composition was radically different. 

In September, Japanese investors were large new buyers of US bonds and net sellers of rest of the world's bonds.  In October, Japanese investors bought JPY148 bln US bonds compared with JPY1.732 trillion.  Japanese investors doubled the amount of French bonds they bought (JPY239 bln)  in October, over September (JPY117 bln).    Japanese investors also bought JPY65.3 bln of Italian bonds, the most since June 2011.  Overall, they bought JPY463.8 bln euro-denominated bonds. 

Japanese investors also scooped up bonds from the dollar-bloc.  They bought JPY130 bln of Australian government bonds and JPY189.2 bln over all, the most since June 2012 and is only the second month of net purchases since Nov 2012.   Japanese investors purchased almost five times more Canadian bonds in Oct (JPY108 bln) than in September (a little less than JPY23 bln).  

Another noteworthy development was that Japanese investors sold JPY36.1 bln of Singapore bonds.  This may not seem like a larger amount, but it is the largest sell-off since 1998.  We don't see a fundamental change in the macro outlook for Singapore and suspect it may be a function of the low rates.  Yields out to five years are less than 1%.  The Singapore dollar has lost about 2.2%, though it did gain about 1.3% against the US dollar in October after a 1.5% rise in September.

Turning to equities, Japanese investors sold almost JPY198 bln in October.   Except for a minor JPY4.6 bln purchase in August, Japanese investors have been consistent sellers of foreign shares since July 2012.    Over this time they have sold about JPY7.256 trillion (~$73 bln) of foreign shares. 

US shares accounted for the bulk of the selling.  Over the 16-month period, Japanese investors sold JPY4.170 trillion US shares.  In October, US share sales were JPY138 bln (of the JPY198 overall net sales).  In September Japanese investors sold almost JPY254 bln, of which the US accounted for a little more than JPY177 bln.  

Japanese sales of European shares slowed, and there does appear to be a gradual shift toward booking purchases of euro area shares in Luxembourg.  According to MOF data, Japanese investors bought JPY44 bln of Luxembourg shares after JPY21 bln of purchases in September.  Over the 16-month period of selling, Japanese investors bought about JPy468 bln of "Luxembourg" shares, which as we say, likely reflects an account function and is better understood as a proxy for euro-denominated shares.


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Tue, 12/10/2013 - 01:57 | Link to Comment Notarocketscientist
Notarocketscientist's picture

This is why we are not going to recover - even after the collapse - the world as you know it - is over... (I hold a fair bit of gold but when I read this analysis --- I am not sure that will be of much use)

Tue, 12/10/2013 - 06:21 | Link to Comment Seer
Seer's picture

Good stuff for passing along, thanks!

Tue, 12/10/2013 - 01:26 | Link to Comment silverserfer
silverserfer's picture

my source from the street says biticoins, pokemons, and black hair dye

Mon, 12/09/2013 - 19:46 | Link to Comment Super Broccoli
Super Broccoli's picture

damn french and us bonds ? the JGB wasn't crappy enought ?

Mon, 12/09/2013 - 19:12 | Link to Comment novictim
novictim's picture

Geiger Counters should be high on the list...

Mon, 12/09/2013 - 18:19 | Link to Comment CheapBastard
CheapBastard's picture

They've been buying 1-way air tickets outta there!

Mon, 12/09/2013 - 17:52 | Link to Comment whidbey-2
whidbey-2's picture

This is making me nervous, I heard they knew what they were doing. Ok, I have some US Treasuries and if they want them I will sell, but only for gold.

Mon, 12/09/2013 - 16:34 | Link to Comment Jack Sheet
Jack Sheet's picture

Pb jockstraps

Mon, 12/09/2013 - 16:45 | Link to Comment steveo77
steveo77's picture

exactly, protect the gonads from radiation!

Mon, 12/09/2013 - 16:24 | Link to Comment steveo77
steveo77's picture

Japan been buying a bunch of bullshite from their Big Gov

This is my best effort at elucidating the fact that Fukushima was a nuclear explosion of sorts, AND that we were heavily dosed. I think its an important point. I think that knowledge could sway some "swing voters" in the nuclear debate.

Fukushima WAS a Nuclear Explosion, Here Is The Proof
The only way that the tens of tons of uranium and plutonium shown by US EPA air samples could occur was if the explosion came from within the reactor vessel, and/or spent fuel pool. So clearly the explosion was a nuclear type of explosion from within. Nuclear promoters have long stated that nuclear plants can't blow up in a nuclear explosion. We know this to be a lie. In fact Chicago's own Argonne National Lab has video from back in the day when it was "cool" to perform open air tests to blow up reactors to prove the nuclear chain reaction can blow up the reactors. The special type of Nuclear Explosion is called a "prompt moderated criticality".

Mon, 12/09/2013 - 19:31 | Link to Comment old naughty
old naughty's picture

let's think for a moment if that's true... (first came to mind who has the tech to bring on subsequesnt EQ+Tsunami...hummmm)!

so what is next?

war? with obviously not where the money re-invested in...

no gold (and you know who's buying heavy) then what's the play (emphasis here) for gold (and factor in bitcoin)?

The bigQ is do they really really know?



Mon, 12/09/2013 - 16:22 | Link to Comment starman
starman's picture

Japanese loading up on quality Greek dept lol!

Mon, 12/09/2013 - 15:21 | Link to Comment Clint Liquor
Clint Liquor's picture

If they had a lick of sense they would be buying Gold.

Mon, 12/09/2013 - 22:32 | Link to Comment mvsjcl
mvsjcl's picture

Effective shield against radiation?

Tue, 12/10/2013 - 00:20 | Link to Comment Rock On Roger
Rock On Roger's picture

Au is one of the best radiation shields. That is likely why gold was for the gods, silver for man. The gods had lots of exposure to radiation, as they zoomed to and fro heaven.


Stack On

Mon, 12/09/2013 - 10:57 | Link to Comment whatthecurtains
whatthecurtains's picture

From the title I thought this was going to be about radiation suits and geiger counters

Mon, 12/09/2013 - 15:43 | Link to Comment kaiserhoff
kaiserhoff's picture

My thoughts exactly.

If I were Japanese, I would be looking for real estate in the southern hemisphere.

Hold the radiation Garcon, we have already been served.

Mon, 12/09/2013 - 20:02 | Link to Comment Alternative
Alternative's picture

They are not very adaptable to different environments and cultures.

Mon, 12/09/2013 - 21:47 | Link to Comment Yenbot
Yenbot's picture

That's a fascinating statement, Alt, and I want to say something witty in response. But I can't. You've stumbled upon a Great Truth.

Doing without a clean marine ecosystem-- I'm long US Pork...

Tue, 12/10/2013 - 06:09 | Link to Comment Seer
Seer's picture

"I'm long US Pork"

Is there really such a thing as "US pork" now (that Smithfield sold to China)? </part sarc>

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