FXStreet (Delhi) – Yujiro Goto, Research Analyst at Nomura, suggests that trust banks, which manage pension funds’ money, bought JGBs in December, for the first time since June 2015. Key Quotes “However, the amount of net purchases remained small at JPY72bn ($0.6bn). In contrast, trust banks purchased Japanese equities and foreign assets aggressively in December, indicating that the shift in pension fund portfolios continues. Trust banks bought JPY743bn ($6.2bn) of domestic equities, their biggest monthly purchase in three months, according to the JPX. They also bought JPY768bn ($6.4bn) of foreign securities, also their biggest amount in three months. The negative price action in global equity markets in December accelerated the shift of pension fund portfolios back into risky assets, and we expect them to remain dip buyers of foreign assets. High frequency data also show retail investors’ risky asset purchases via toshins are recovering. Retail investors purchased JPY29bn ($0.2bn) in foreign securities via toshins last week for a third straight week of net puchases. They also bought JPY102bn ($0.9bn) of domestic assets via toshins, for a seventh straight week of net purchases. Although risky asset investment via toshins slowed from November to mid-December, toshin momentum is clearly recovering. Retail investors likely see the recent weakness in global equity markets as a good opportunity to dip buy. Negative risk sentiment amid lower expectations for Fed rate hikes is depressing USD/JPY, but we judge dip buying demand from Japanese investors remains strong. BOJ officials are reportedly disappointed by the wage talk outlook, according to Bloomberg (unconfirmed), which suggests the likelihood of BOJ easing is now rising. We downgraded our near-term USD/JPY forecast, but downside risks to USD/JPY from the current level of around 116 are limited, in our view.” For more information, read our latest forex news.