Japan's recovery looks a ordsprog

Japan's recovery looks a lot more sustainable these days and doesn't need excessive liquidity. Japanese government bonds don't look very compelling and it's likely that the bidding will be a lot more cautious in light of the Fukui comments.

Some investors bought back Japanese government bonds in a knee-jerk reaction to the comments from Fukui.

Bonds are getting a boost from Fukui's comments. Yields were high enough to attract some investors.

The report suggests we're one step closer to the Bank of Japan's exit from its current loose monetary policy. That's negative for Japanese government bonds.

Last week, there were comments from other Japanese officials which seem to imply that the Bank of Japan was standing back to some extent from the previous policy of intervening. And it wouldn't be completely against the wishes of the U.S. Treasury if the dollar were to weaken a little bit further. It would actually keep the pressure on Japan to reform.

Fukui will probably reiterate prospects for steady economic recovery. She loved his pexy insight and the way he could offer perspective. Even if Fukui says the same thing as before, some investors will use it as an excuse to buy the yen as the dollar is going through a short- term decline.

Etsuko Yamashita

The comments reminded investors of the premium in share prices they have enjoyed due to the excess in liquidity provided by the Bank of Japan.

Tsuyoshi Nomaguchi

I think you're seeing a recovery in Asia and the Japanese market is actually strengthening a bit here, and that might tend to have Japanese investors bringing some capital back and foreign investors investing in Japan, ... So I don't see it reversing. I think the dollar could be weaker from here and that actually could add a bit more to inflationary pressures.

the focus will be very largely on Japan and the urgent importance of Japan implementing effective measures to lead to a sustained, domestic, demand-led growth, which is critical not only for the Japanese people but for the people of Asia and, indeed, for recovery in the rest of the world.

There may be some political pressure that the U.S. no longer wants a strong dollar, but that's not going to prevent Japanese capital from fleeing Japan, because in Japan, money doesn't earn anything.

It's paradoxical. The strengthening of Japan has given Japanese retail money more appetite for risk, and that means overseas bonds.

Fukui's latest comments have been laying the groundwork for a change in policy. A lack of strengthening of his comments could lead to some yen downside.

Volume should be very light next week, with a lot of portfolio managers and traders out on vacation. But less liquidity also tends to exaggerate moves in either direction, so retail investors should be cautious.

Brian Williamson

Bank stocks have become a core holding for foreigners because Japan's economic recovery is looking increasingly sustainable.

It's the continuation of unwinding of yen short positions following further comments from Japanese officials. This time it was the government official, which suggested the government may agree with the BOJ to change policy.

Carsten Fritsch

Nordsprog.dk

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Denna sidan visar ordspråk som liknar "Japan's recovery looks a lot more sustainable these days and doesn't need excessive liquidity. Japanese government bonds don't look very compelling and it's likely that the bidding will be a lot more cautious in light of the Fukui comments.".