Analysts at BBH note that Japan’s Ministry of Finance confirmed that foreign investors returned to Japanese equities.  

Key Quotes

“Foreign investors had been selling Japanese equities since July but were net buyers in the last week of September (~JPY954 bln).  MOF data showed foreign investors bought about JPY1.23 trillion of Japanese shares last week, which appears to be the most on four years.”

“The dollar slipped to JPY111.85, which is the lowest level since September.  However, the greenback recovered in the European morning as US yields also rose.  Initial resistance is seen around JPY112.40.  The US 10-year yield is edging higher for the first time in three sessions.  The yield peaked a week ago near 2.40%, which capped US benchmark yield over the past six months.  The dollar-yen exchange rate is particularly sensitive to US 10-year yields.  There is a $579 mln option struck at JPY112.50 that will expire today.  There is also a 513 mln euro option struck at $1.18.”  

 

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