FXStreet reports that according to economists at MUFG Bank, the USD/JPY pair could find a tailwind from a big jump in foreign bond buying,.
“The weekly MoF data released on Thursday revealed JPY1,761.4 B worth of foreign bond purchases – a year-to-date record and the largest since November last year. Foreign investor buying of Japanese stocks recorded a third week of buying although the pace of buying slowed. The total reported last week was the largest since April. But there was limited follow-through in buying in this week’s data and we are sceptical of there being any meaningful change in policy direction that will fuel any great shift in cross-border flows. Greater outflows to foreign bonds could play a role in providing support for USD/JPY, especially at lower levels.”