Survey Highlights Belief in Japanese Money Staying Offshore

A recent Bloomberg Markets Live Pulse survey indicates that Japanese money is expected to stay offshore as the
country’s central bank adopts a tighter policy. Out of the 273 respondents, only about 40% believed that
the Bank of Japan’s first interest-rate hike since 2007 would prompt investors to sell foreign assets and
repatriate the proceeds back home. This finding brings good news for US stocks and bonds.

Positive Outlook for US Stocks and Bonds

The survey’s results suggest that a major portion of Japanese investors is hesitant about repatriating their
funds amid the central bank’s transition to tighter policy. This hesitation indicates a continued
preference for foreign assets, including US stocks and bonds.

Long-Term Implications for Japanese Money

As the Bank of Japan inches closer to tightening its monetary policy, the survey suggests a prevalent strategy
among Japanese investors to keep their funds offshore. This preference has several potential outcomes:

• Stability of Markets: The sustained investment of Japanese money in foreign stocks and bonds contributes
  to market stability, particularly in US stocks and bonds, providing a sense of reassurance for
  intermarket dynamics.
• Foreign Opportunities: Japanese investors foresee opportunities abroad in foreign markets, and their
  willingness to invest drives economic engagement and diversification.
• Exchange Rates: With a significant portion of funds remaining offshore, currency exchange rates may be
  influenced, accounting for potential advantages and disadvantages for different stakeholders.

Time for Foreign Investors to Benefit

Foreign investors in the US market, particularly in stocks and bonds, might find this survey encouraging.
Japanese finances staying offshore indicate sustained demand and potentially positive market performance.

Conclusion

With the Bank of Japan’s first interest-rate hike expected to have limited impact on Japanese investors’
decision to repatriate foreign assets, the survey suggests a continuing enthusiasm for US stocks and bonds.
As the central bank moves closer to a tighter policy, the outlook for foreign investments strengthens,
providing stability and potential opportunities.