Identifying the winners from Bank of Japan easing moves

The rally in USD/JPY caused by the Bank of Japan’s (BoJ) easing announcement early this month has been driven entirely by leveraged short-yen positioning. Japan’s capital flows data shows that, since the election in December, Japanese investors have been relentless sellers of overseas assets, while overseas investors have rapidly increased their exposure to Japanese stocks.

Capital flows with an asset transaction behind them have been strongly yen-positive. The recent build-up in bearish yen