LONDON (Reuters) - Cash funds saw a mammoth $93.2 billion of inflows in the week to Wednesday, Bank of America Global Research strategists said in a report, the largest inflow since March 2023, as high yields on short-dated debt continue to attract investors.
BofA's weekly 'Flow Show' showed equity funds saw $6.2 billion of inflows, led by U.S. equity funds, which saw $5.5 billion of inflows.
Japanese equity funds saw outflows of $500 million, the fifth straight week, as markets bet that the Bank of Japan's ultra-loose monetary policy could be close to an end.
The yen has strengthened over 1.5% against the dollar in the latest week, while Japan's main stock index, the Nikkei 225 has fallen almost 3.5%.
Bank of America's bull and bear indicator, a measure of investor sentiment, rose to 3.8 from 2.7. This was the indicator's biggest weekly jumps since February 2012, driven by the biggest six-week high yield bond inflow since August 2020 and high emerging market stock inflows.
"Bear sentiment flipping to speculative animal spirits," BofA strategists said.
"Sentiment no longer contrarian positive for risk assets."