OK, time for me to flog a dead horse once again. Here goes:

Despite the recent reversal of anticipated flows to EU bonds from Japan’s unprecedented monetary easing, developments in Tokyo could yet lead to substantial inflows to Europe from Japanese institutional buyers.

I can’t remember when I started saying this outflow from Japan was going to happen, it was quite a while ago. Colin Reimer (in the comments) was pretty quick to say it wasn’t going to happen. Colin was right. I’ve been … ummm …. I believe ‘early’ is the popular euphemism for ‘wrong’. Yeah, “early” … thats what I’ve been.

OK, so any time now, according to Nomura:

  • Japan’s Government Pension Investment Fund (GPIF) to soon start acquiring more foreign assets
  • GPIF moving, partly due to pressure from Japanese PM Abe
  • Partly due to recent volatility in JGB market
  • GPIF to cut its allocation to domestic bonds from 67% to 60% of its ¥112 trillion ($1.17 trillion) total assets
  • Will boost holdings of domestic stocks from 11% to 12%
  • Allocation to foreign stocks will rise from 9% to 12%
  • Allocation to foreign bonds from 8% to 11%
Watch me pull a rabbit out of a hat ... This time for sure!

Watch me pull a rabbit out of a hat … This time for sure!