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17 Jun 2013
Flash: Tracking the shifting sea of Japanese assets – UBS
FXstreet.com (Nww York) - Japanese public money is finally shifting overseas as the foreign assets of Japan Post Life Insurance (Kampou) have steadily increased in recent months, according to the latest public data releases.
Indeed, the trend began last October shortly before the Lower House was dissolved. Crucially, it continued in April after BoJ Governor Kuroda launched QQE. According to Research Analyst Gareth Berry at UBS, “Valuation effects due to currency moves alone cannot fully explain the changes. Overseas securities holdings were up 72% between end-Sept and end-April, but the USD/JPY only rose 25% over that time. So the evidence suggests fresh investment into overseas assets may be underway.”
There is potentially plenty more where that came from. Despite yen outflows to date, foreign securities still only account for about 1.2% of Kampou's total US$908 bn assets under management. Japan's public sector more generally is underweight foreign assets too, at least by international standards. For example, GPIF's foreign holdings stood at 22.7% on Dec 31st, but the new benchmarks announced on June 7th suggest an even friendlier bias towards overseas investment.
Indeed, the trend began last October shortly before the Lower House was dissolved. Crucially, it continued in April after BoJ Governor Kuroda launched QQE. According to Research Analyst Gareth Berry at UBS, “Valuation effects due to currency moves alone cannot fully explain the changes. Overseas securities holdings were up 72% between end-Sept and end-April, but the USD/JPY only rose 25% over that time. So the evidence suggests fresh investment into overseas assets may be underway.”
There is potentially plenty more where that came from. Despite yen outflows to date, foreign securities still only account for about 1.2% of Kampou's total US$908 bn assets under management. Japan's public sector more generally is underweight foreign assets too, at least by international standards. For example, GPIF's foreign holdings stood at 22.7% on Dec 31st, but the new benchmarks announced on June 7th suggest an even friendlier bias towards overseas investment.