27 Jun 2013
Flash: Another look at Japanese shares - BBH
FXstreet.com (London) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that the US and Japanese equity markets have been among the best performing equity markets this year, but the gains in US equities seem to be largely a function of domestic accounts.
He begins by noting that foreign investors appear to have played a larger role in the advance of Japanese shares. he writes, “Weekly Ministry of Finance data shows foreign investors have bought $79 bln worth of Japanese equities this year (through mid-June).”Typically, he comments that foreign investors focus on the big blue chip names. However, many of these companies have sophisticated currency hedging programs and had bought protection from their traditional nemesis, a stronger yen. Smaller companies are more flexible and are, arguably, better positioned to benefit from the weaker yen.
He begins by noting that foreign investors appear to have played a larger role in the advance of Japanese shares. he writes, “Weekly Ministry of Finance data shows foreign investors have bought $79 bln worth of Japanese equities this year (through mid-June).”Typically, he comments that foreign investors focus on the big blue chip names. However, many of these companies have sophisticated currency hedging programs and had bought protection from their traditional nemesis, a stronger yen. Smaller companies are more flexible and are, arguably, better positioned to benefit from the weaker yen.