Japanese investors net bought more than 5 trillion yen of foreign equities and long-term bonds in the two weeks ended Aug. 15, reversing net sales of over 300 billion yen in the previous two weeks. The buying followed a joint U.S.-Japan currency intervention that strengthened the yen from around 164 per dollar to roughly 155, allowing investors to purchase overseas assets at more favorable exchange rates. Jesper Koll, expert director at Monex Group, said the intervention had "turbo charged" the carry trade, in which investors fund purchases of higher-yielding assets with cheaper borrowing. Because Japan’s borrowing costs remained below overseas returns, the yen’s gains quickly faded toward 159 per dollar. The U.S.-Japan 10-year yield spread was roughly 1.8 percentage point as of Thursday, reinforcing expectations that the yen will remain under pressure unless the Bank of Japan narrows the gap through higher rates. Japanese institutional and retail investors continued adding non-yen assets, while speculative net short yen positions fell from almost 138,000 contracts at the end of June to 59,526 as of Aug. 11, according to CFTC (U.S. derivatives regulator) data.