Current account surplus sold back into Yen - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that a key element of yen demand has been the conversion of foreign currency to yen on current account flows.

Key Quotes:

"Japan’s growing portfolio of assets abroad coupled with the plunge of the yen between 2013-2015 resulted in the income earned on these assets surging. That investment income surplus (12mth) totalled JPY 20,155bn in May, marginally below the record JPY 21,194bn set in August of last year.

While the yen was plunging, a larger portion of these surpluses were left in foreign currency but the turn in JPY momentum since January has resulted in more of these surpluses now being converted back into JPY. The investment income surplus in 2015 totalled JPY 20754bn from a 2014 total of JPY 19,495 and JPY 16,480bn in 2013. total was some 47% larger than the total in 2012 prior to when much of the ‘Abenomics’ induced yen devaluation took place. The 2015 total was some 47% larger than the total in 2012 prior to when much of the ‘Abenomics’ induced yen devaluation took place.?