Japan Bond Uncertainty Slows Yen Asset Repatriation
Uncertainty over Japanese bond yields and interest rates is holding back a larger repatriation of overseas assets. While fast money has left, institutional investors remain cautious. This hesitation limits the scope for a sustained yen recovery.
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Japan investors repatriated 4.8 trillion yen in sovereign debt last month, but a broader homecoming of overseas capital stalled amid climbing domestic bond yields. The shift follows a rate hike by the central bank last week, though policymakers offered few clues on how much further borrowing costs will rise. The hesitation leaves overseas capital parked abroad and caps the scope for a sustained rally in USD/JPY.
