Forex Flash: Did Kuroda-led BoJ stimulate hedge reduction? – UBS

FXstreet.com (Barcelona) - Some market participants have expressed surprise that Japanese investors were net sellers of foreign assets in early April. The latest official data confirms this. So, are expectations of accelerated Japanese outflows very wide of the mark, despite BoJ easing on April 4th? According to Research Analyst Gareth Berry at UBS, “It’s far too soon to reach such a conclusion in our view for a few reasons: The latest weekly data only cover only up to Friday April 5th. That’s just a day after the BoJ announced a major expansion of its easing program, and not enough time for most real money investors to react.”

Moreover, annual outflows from lifers in particular do not usually get underway in earnest until late April, or even early-May. There is no official data on lifer FX hedge ratios. If the Kuroda-led BoJ has provoked hedge reduction, semi-annual company reports for Sept. 2013 will reveal this. However, these filings will probably not be available until October or even November.