Yen gains on sale of foreign bonds

The Japanese yen gained in value on Monday on new data showing that Japanese investors sold off foreign assets during the week ending March 17 at a rate six times higher than they had the previous week. This trend seemed to be continuing as the end of the fiscal year approaches. The sales of ¥1,480 in foreign bonds was the largest one-week sale on record in Japan.

Some analysts said that the sell-off was not especially significant, since Japanese investors often sell their foreign assets right before the fiscal year ends and then make new purchases after the new year begins. Not all analysts expect to see the same pattern this time around, however. One analysts, for example, was of the opinion that higher bond yields, lower unemployment, and a healthy equities market could tempt more Japanese investors to spend their money domestically rather than putting it in foreign assets.

The day saw the yen add 0.8 percent to ¥116.61 in relation to the US dollar. It gained 1 percent on the euro, to ¥140.05, and put on 0.6 percent to ¥203.64 versus sterling. Additionally, the yen was up 1.2 percent to ¥82.34 versus the Australian dollar and added 1.5 percent in relation to the New Zealand dollar, to ¥70.66.

Sterling also was up on the day, adding 0.2 percent to $1.7467 versus the US dollar. The British currency gained in relation to the euro as well, gaining 0.4 percent to £0.6876.

Trade in the US dollar was sparse as investors waited for the US Federal Reserve to meet on Tuesday to make a decision on what to do with interest rates. The greenback did gain a fraction in relation to the euro, to $1.2011.

Discuss this in the Finance Markets forums

Story link: Yen gains on sale of foreign bonds