Japanese investors sell foreign bonds for third straight week
Rising Japanese rates are beginning to lure some of the country's vast overseas investments home, marking a notable shift in global capital flows.
Japanese investors have continued to sell foreign bonds for a third consecutive week, amid surging US Treasury yields and growing returns at home. The Ministry of Finance reported they sold foreign debt worth a net 503.6 billion yen, marking the smallest weekly total in the past three weeks. This trend comes as the US 10-year Treasury yield reached a 24-1/2-year high of 5.3645%, driven by worries about inflation and government debt.
Japan's own 10-year government bond yield hit a 30-year high of 3.122%. This shift in capital flows could support the yen and put pressure on bond markets, where Japan has historically been a major buyer. According to Guillermo Felices, global investment strategist for fixed income at PGIM, the narrowing yield advantage of overseas debt, combined with the cost of hedging foreign-currency exposure, has made Japanese government bonds increasingly attractive compared to US and European securities.
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- Japanese investors sell foreign bonds for third straight week freemalaysiatoday.com
