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I track foreign holdings of US treasuries as reported by the Fed weekly in
Barrons. Holdings have been very stable to slightly increasing. The last
major decline was approximately 10% something over a year ago.
Earl
----- Original Message -----
From: Gautier <ggautier@xxxxxxxxxxx>
To: 'List Serenity-Trading' <serenity-trading@xxxxxxxxxxx>; 'List RT'
<realtraders@xxxxxxxxxxxx>
Sent: Tuesday, September 14, 1999 9:33 AM
Subject: Japan and $ yen
> With $ yen rates reaching new lows in the 10550s, some questions start
> appearing. Those dollars being sold versus Euro have to come from
somewhere. It
> is hardly exports proceeds being sold, so it is quite likely to be money
> brought back home by Japanese Insurance funds, and other institutionals to
meet
> rising capital needs in Japan itself.
>
> If that is the case, this may explain why bonds have done so poorly and
have
> been marred in a downtrend for months, even as market pundits declared at
each
> fed move: "this is the last", which btw I don't subscribe to.
>
> Maybe the question is not so much how much inflation there is or not in
the
> States, but more how many investment opportunities are there still to be
found
> in the US at attractive rates versus Japan for example. With all the
> restructuring efforts still before them in Japan, some seem to be betting
on
> the land of the rising sun.
>
> Next is to consider that the Nikkei index is likely to be modified to
reflect
> the more modern Japan of 2000, with the inclusion of such stars as
Softbank.
> That would only help propel the Nikkei even faster on the upside (which I
> suppose is the goal of the government). which would attract further
momentum
> followers.
>
> Add to this that Private equity holdings are at historical lows as well as
> western lows, versus the US extremes, it looks increasingly like the
capital
> flows of the eighties from yen into dollar and US assets are subsiding in
favor
> of Japan. That may mean also the good days of the running bull market in
the US
> may increasingly become a thing of the past.
>
> Just an opinion, but speaking of going with the flow, that might be an
> interesting one to watch.
>
> Gwenn
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