Institutions: Uncertainty from the Central Bank of Japan may weigh on bets on the return of Japanese funds

Huitong Financial News Investors who bet that Japanese funds will return in large quantities this year may be disappointed. Observers of capital inflows and outflows to Japan had been expecting tighter monetary policy to push domestic yields high enough to spur the return of money invested abroad. However, the timing of any changes by the Central Bank remains uncertain, and a study of Japan’s 2023 balance of payments data shows that expectations of change are not enough to trigger inflows, an outcome that could be repeated this year. Gareth Berry, a strategist at Macquarie Group in Singapore, said he simply did not believe in the idea that the yen would return. The barrier to net repatriation is very high. Even in the immediate aftermath of the global financial crisis, Japanese investors did not withdraw their funds, even though the strengthening of the yen at the time was attributed to the repatriation of funds.