Forex Flash: Japanese investors sell AUD assets in abundance – Westpac

According to FX Strategist Robert Rennie at Westpac, “Japanese investors had started selling down Australian assets in H2 last year on a number of occasions and as recent data suggests, we should upgrade that view to reflect the fact that Japanese sales of AUS assets late last year hit an all time record high.”

Using Investment Trust Association of Japan data, we find the value of investment trusts invested in Australia fell by AUD 12B in the year to December. Using Westpac’s AUD uridashi database, we find that Japanese investors dumped AUD 10B of Australian retail bonds in the year to January. Using MOF data, we find that Japanese investors sold a net AUD 1.5B of Australian assets in the year to December.

“If we isolate the November and December MoF numbers for 2012, the pace of selling was even more aggressive. Almost AUD 8B of Australian assets was sold in those two months by Japanese investors. That is an all time record and gives a clear sense of how aggressive this selling was.” Rennie adds.