JP Morgan Research discusses the latest batch of data on Japanese flows and FX positions.

"The closely monitored monthly data revealed net foreign equity purchases of ¥0.6trn (JPMe: -¥1.7trn) and net foreign bond purchases of ¥2.3trn (JPMe: + ¥0.9trn) by "Trust Accounts," which reflect pension funds' activities. Both figures point to continued net accumulation of foreign assets contrary to prevailing market speculation which expects a shift towards domestic assets from foreign assets," JPM notes.

"Retail investors turned JPY short following the sharp JPY move last week.  Retail investors net purchased ¥1.3trn of foreign equities in August, the largest net purchase since January, underscoring sustained appetite for foreign assets despite a concurrent rise in retail JGB demand," JPM adds.