GS Fishman Japanese Portfolio Reallocation Still Mostly Speculation 8 Sep 2026

GS Fishman - Japanese Portfolio Reallocation Still Mostly Speculation 8 Sep 2026 Karen Fishman · Goldman Sachs · FX Research / Economics Tue 8 Sep 2026, 6:41am ET

As we highlighted in our latest Global FX Trader, there's been growing speculation of an imminent reallocation by Japanese investors away from unhedged foreign assets and back towards domestic assets. We also noted that it was likely too early to see much shift, and the latest International Transactions in Securities data just released for August still show no signs of reallocation by unhedged investors. In fact, the trust accounts category, which includes the public pension fund, suggests that net purchases of foreign bonds accelerated in August, to over $14.5bn (a monthly pace only surpassed twice over the past five years) vs. $5.5bn in July. The investment trusts category, which includes retail investors and NISA account flows, also shows continued demand for foreign equities in August – even exceeding the average pace of buying over recent months ($7.8bn vs. $6.0bn on average over the past six months). More broadly, our preferred estimate of key unhedged investor flows suggests that demand for foreign bonds has generally persisted at a similar pace over the past year. If that were to change, however, these data would be the first place to see it. While less relevant for the Yen, the outflows from foreign bonds over recent months among typically hedged investors (mainly banks) seem to have stalled in August. Source: Goldman Sachs Global Investment Research / FX Research Notes.