1 Aug 2013
Flash: AUD/JPY yield ratio suggests fall in cross – Westpac
FXstreet.com (New York) - Global FX Strategist Sean Callow at Westpac analyzes the yield ratio between the AUD/JPY and its impact from foreign bonds.
Key quotes
“The yield pickup offered on AUD over JPY in the 2-year area remains historically low but hasn’t moved much lately.”
“While yield spreads have been a poor guide to the AUD/JPY trend since late 2012, they are not irrelevant. Japanese investors were heavy sellers of AUD bonds from late 2012 into Q1 2013 and have shown no particular interest recently to resume purchases. This may well change later this year given the fall in AUD/JPY and (finally) some return of Japanese demand for foreign bonds in recent weeks.”
Key quotes
“The yield pickup offered on AUD over JPY in the 2-year area remains historically low but hasn’t moved much lately.”
“While yield spreads have been a poor guide to the AUD/JPY trend since late 2012, they are not irrelevant. Japanese investors were heavy sellers of AUD bonds from late 2012 into Q1 2013 and have shown no particular interest recently to resume purchases. This may well change later this year given the fall in AUD/JPY and (finally) some return of Japanese demand for foreign bonds in recent weeks.”