Japanese Repatriation Flows and the Yen

The report evaluates the potential for Japanese capital repatriation to strengthen the Yen, concluding that such flows are unlikely to be significant without better interest rate differentials.

Key Takeaways

• 1.Japanese investors (excluding the MoF) hold approximately $6 trillion in foreign assets, most of which are unhedged.
• 2.Japan Post Bank is unlikely to drive Yen appreciation because its investments are primarily currency-hedged.
• 3.GPIF is the most influential investor for FX, but major allocation changes are unlikely before the 2030 strategy review.

Table of Contents

• Japanese Repatriation Flows—What Matters Most for the Yen
• TRADE IDEAS
• Best Trade Ideas Across Assets
• G10 FX Strategy Team
• Disclosure Appendix