12 Jun 2015
Japanese lifers to continue AUD buying – Nomura
FXStreet (Barcelona) - Research Analysts at Nomura, offer their view on Japanese lifers investment in AUD and NZD.
Key Quotes
“According to data from the Financial Futures Association of Japan data on over-the-counter FX margin trading, margin traders were net long AUD by JPY405.9bn in April, decreasing sharply from March (JPY787.7bn net long positions).”
“AUD/JPY ranged around 92 through mid-April. According to Gaitame, the ratio of net long positions (ratio of long positions to short positions) held by margin traders remained largely unchanged during this period, suggesting that these traders held back from making aggressive trades. In late April, AUD strengthened substantially in response to modestly-above-consensus CPI data and a rebound in iron ore prices, with AUD/JPY approaching 95. The ratio of margin trader long positions fell in this same period, likely reflecting these investors’ substantial profit-taking. AUD/JPY remained above 95 through May. The ratio of net long positions has been largely unchanged, with a brief increase followed by a substantial fall.”
“We believe these traders will be slow to add back long positions. Nevertheless, as the lower end of the range for this ratio is edging up, retail investors are likely to continue to buy AUD while raising their target trading ranges, in our view.”
“At the same time, retail investors were net long NZD by JPY164.8bn in April, falling slightly from March (JPY184.4bn net long positions), in contrast with their positioning on AUD. NZD/JPY moved sideways in April, showing little directionality.”
“As the difference between Japan and New Zealand interest rate differentials remained substantial, we believe margin traders likely looked to retain their net long NZD/JPY positions. However, NZD/JPY fell from levels above 92 to below 89 in early May. The ratio of net long positions for NZD/JPY rose during this period, so we think margin traders will have added to their long positions.”
Key Quotes
“According to data from the Financial Futures Association of Japan data on over-the-counter FX margin trading, margin traders were net long AUD by JPY405.9bn in April, decreasing sharply from March (JPY787.7bn net long positions).”
“AUD/JPY ranged around 92 through mid-April. According to Gaitame, the ratio of net long positions (ratio of long positions to short positions) held by margin traders remained largely unchanged during this period, suggesting that these traders held back from making aggressive trades. In late April, AUD strengthened substantially in response to modestly-above-consensus CPI data and a rebound in iron ore prices, with AUD/JPY approaching 95. The ratio of margin trader long positions fell in this same period, likely reflecting these investors’ substantial profit-taking. AUD/JPY remained above 95 through May. The ratio of net long positions has been largely unchanged, with a brief increase followed by a substantial fall.”
“We believe these traders will be slow to add back long positions. Nevertheless, as the lower end of the range for this ratio is edging up, retail investors are likely to continue to buy AUD while raising their target trading ranges, in our view.”
“At the same time, retail investors were net long NZD by JPY164.8bn in April, falling slightly from March (JPY184.4bn net long positions), in contrast with their positioning on AUD. NZD/JPY moved sideways in April, showing little directionality.”
“As the difference between Japan and New Zealand interest rate differentials remained substantial, we believe margin traders likely looked to retain their net long NZD/JPY positions. However, NZD/JPY fell from levels above 92 to below 89 in early May. The ratio of net long positions for NZD/JPY rose during this period, so we think margin traders will have added to their long positions.”