Yen Strength Continues as Buyer is Clear - BBH
Research Team at BBH, notes that there has been a surge in Japanese portfolio capital outflows and it appears that Japanese Investors were not repatriating their Foreign holdings as the safe have hypothesis would suggest, but buying prodigious (record) amounts of foreign bonds in March.
“Japanese investors were also consistent, even if less dramatic, buyers of foreign shares. There are some seasonal patterns at the start of the new fiscal year (April 1) that may be distorting the recent weekly data, which is why we note the larger pattern, which does not suggest the yen has been bought as a safe haven.
We suspect that flows that are less transparent, like repatriation of foreign earnings by Japanese or unwinding of hedges by foreign investors liquidating Japanese equities that have fallen in price, or Japan institutional investors hedging their currency risk (buying yen) played a role earlier this month.