Goldman Sachs analyzes the impact of anticipated Japanese repatriation flows, particularly from major institutions like GPIF and financial firms shifting allocations away from foreign bonds. While expectations lean toward a domestic stock and bond reallocation, there is little evidence yet of substantial foreign bond repatriation, making JPY strength potentially premature.Key Insights:1️⃣ Major Institutional Shifts 📊A large Japanese financial institution plans to reduce exposure to foreign bonds after consecutive losses.GPIF’s five-year portfolio review (expected by March-end) could reverse previous shifts into foreign bonds, favoring domestic stocks and possibly JGBs.2️⃣ Market Expectations vs. Reality ⚖️Markets expect repatriation flows into domestic assets, strengthening JPY.However, weekly data show no clear evidence of significant foreign bond selling yet.3️⃣ Trading Implications 💡If repatriation flows materialize, JPY strength could be more persistent.If flows fail to emerge, Goldman sees an opportunity to position for a tactical reversal, meaning JPY could weaken again.Conclusion:Goldman acknowledges the case for JPY strength from anticipated repatriation flows but sees no concrete signs yet. If flows do not accelerate, the bank prefers positioning for a tactical JPY reversal rather than chasing further upside.For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here. This article was written by Adam Button at www.forexlive.com.