Appeal of Euro Falls Sharply as Yen Rises for Japanese Traders

The Tokyo headquartered financial services giant Nomura (TYO: 8604) released today an individual investor survey providing information on sentiment and related trends in Japan. The results are based on the first 1,000 respondents out of 3,000 individual investors, randomly selected from approximately 24,000, with equity investment experience participating in the questionnaire service.

Investors were asked to select the factor most likely to impact the stock market in the next three months. The most-watched factor was international affairs, at 74.8%, up 25.8 percentage points month-over- month. This is attributed to the heightened interest to international affairs in Japan due to recent events such as the Greek referendum on fiscal austerity measures demanded by the European Union and the sharp decline in the Chinese stock market.

On the outlook for USD/JPY over the next three months, the combined percentage of respondents expecting the yen to appreciate against the US dollar was 55.4%, up 1.2 percentage points month-over-month from the previous month. The response rate for "rise of more than ¥10 against the dollar" was up 3.5 percentage points month-over-month, the largest increase for all the options.

Investors were also asked to choose one currency as an "appealing" investment target and one as "unappealing" over an approximately three-month timeframe. Nomura calculated a Delta Index (DI) for each currency by subtracting the percentage of responses for "unappealing" from that for "appealing."

The US dollar remained the most appealing, with a DI of 34.1, although its DI fell 6.7 percentage points month-over-month. The DI for the euro dropped a sharp 21.5 percentage points month-over-month, the largest decline for any currency. In contrast, the DI for the yen rose 13.6 percentage points month-over- month, the most of any currency.