Japanese investors are snapping up foreign currencies, local stocks and U.S. Treasurys after the country’s new central bank chief damped speculation he will start normalizing policy.
Among their investments, Citigroup clients are buying U.S. and Australian dollars to profit from their interest-rate premiums over the yen, said Keita Matsumoto, head of financial institutions sales and solutions at Citigroup Global Markets Japan. Their activity shows clients have shifted bets on changes to the Bank of Japan’s ultraeasy policy to as late as the second half of next year, he said.
"The vast majority of clients are determined to wait and see” before investing in Japanese government bonds (JGBs), Matsumoto said in an interview in Tokyo. "We are now seeing more interest in foreign exchange, Japanese equity or the U.S. Treasury market. Probably the most interesting is the FX (foreign exchange) market.”