Rising yields draw foreign investors to JGBs for third week
TOKYO: Foreign investors bought long-term Japanese government bonds (JGBs) for a third straight week through Sept 5, drawn by rising domestic yields and prospects of a Bank of Japan interest rate hike.
TOKYO - Foreign investors continued their purchase of Japanese government bonds (JGBs) for the third consecutive week, ending on September 5, 2022, driven by a surge in domestic yields and the potential for a Bank of Japan interest rate hike. According to data from Japan's Ministry of Finance, they made a net purchase of 449.6 billion yen (approximately US$2.93 billion) in long-term Japanese bonds while selling a net of 275.2 billion yen worth of short-term bills.
The 10-year JGB yield rose to a record high of 3.015 per cent, the highest since September 1996, sparking speculation that Japanese investors might start redirecting capital back to their home country. Comments from BOJ board member Hajime Takata expressing hawkish views and US support for Japan taking decisive monetary action to tackle inflation and weakness in the yen further bolstered expectations of a rate hike.
The Japanese yen surged to a near seven-month high of 152.87 per dollar on Tuesday, after rising 2.43 per cent the previous week. During the week, foreign investors bought a net 690 million yen worth of Japanese stocks, the largest weekly net purchase since July 25. Meanwhile, Japanese investors bought a net 111.9 billion yen worth of foreign long-term bonds after two weeks of selling.
They also purchased around 103.8 billion yen worth of short-term bills and sold 481.6 billion yen worth of overseas stocks following a modest purchase of 35.8 billion yen in the previous week.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
