Forex Flash: AUD buying via currency selection-type toshins resumed - Nomura

FXstreet.com (Barcelona) - Nomura strategist Yujiro Goto notes that Japanese investors were net buyers of foreign currencies via currency selection type toshins last week for the second week in a row.

He adds that the pace of buying accelerated to JPY76bn (USD0.8bn) from the previous week (JPY59bn). Daily toshin flow data compiled by NRI also suggest gradual recovery of toshin momentum after major selling in the second week of April to book profits.

In terms of the choice of currency, he feels that the first net buying of AUD since the first week on November is worth mentioning. He notes that retail investors have been liquidating AUD since last November, while purchasing JPY and BRL. The amount of AUD buying is still very small (JPY4bn), but liquidation of AUD assets has been clearly slowing. The share of AUD in total outstanding of currency selection-type toshins has declined to 13.2%, the lowest level since December 2011. He writes, “While retail investors are still likely to prefer higher-yielding EM currencies such as BRL and TRY, we think AUD selling may slow from now on.”