Japanese investment in AUD assets surged in November amid rising yields - Nomura

Research Team at Nomura notes that according to the official data, net purchases by Japanese investors increased sharply in November for AUD assets.

Key Quotes

“The spike was led by purchases of government bonds, although interest in Kangaroo (SSA and corporate) bonds remained solid. Interest in AUD bonds was particularly notable in the context of sales of USD bonds in November, and sales of foreign bonds (in aggregate) in December, due, we believe, to increased market volatility and US policy uncertainty.”

“Looking ahead, we note positive retail and lifer interest in AUD bonds, although we suspect USD bonds should resume their “number 1” ranking (in terms of purchases by Japanese investors) if FX and bond markets calm and US policy uncertainty fades.”