• 
• See all for FXstreet.com
• View Print Version

• European Morning Wrap: Central banks with a twist of Italy
• Forex Flash: Yen rebound continues ahead of BoJ meeting - BTMU
• Forex Flash: BoJ Kuroda Diet comments bolstered JGB market - BBH

• APP 100% Rate It

FXstreet.com (Barcelona) - The latest asset allocation data for Japanese Toushin fund managers shows that euro outflows stopped in July. According to Research Analyst Chris Walker at UBS, "There was however, some sizeable switching out of German and into French bonds, which is consistent with a reach for yield, though one that is currency-neutral."

The total stock of JGBs held by the BoJ has exceeded the value of banknotes in circulation for the first time. Newswires devoted some attention to this, given that the BoJ operates a self-imposed rule, which at first glance should prevent this from happening. "We note however that the BoJ buys JGBs through two distinct programs - the traditional Rinban operations and the more recent Asset Purchase Program ( APP )." Walker adds. JGBs acquired through the APP are actually exempt from this rule and so the BoJ has not in fact breached any constraints on its JGB holdings.

Hence, "we would not be surprised however if some press reports see this as a sign of over-zealous bond buying, that could be seen as a modest yen negative." he predicts.

Related Forex and Currencies Articles

• 
  Bank of Japan keeps aggressive monetary easing policy unchanged
  5/21/2013 11:26 PM
• 
  Forex - EUR/USD little changed ahead of Bernanke
  5/21/2013 11:25 PM
• 
  Asia stocks mixed; Nikkei rallies 1.6% after BoJ meeting
  5/21/2013 11:25 PM