Japanese Investors Shift to Overseas Bonds

(Reuters) – Japanese investors were net buyers of overseas bonds in the week through April 19, as U.S. bond markets recovered somewhat after a heavy selloff earlier this month.

Japanese investors had been net sellers of overseas bonds for six consecutive weeks, joining a broad pullback from dollar assets, driven by concerns over U.S. trade tariff announcements and President Donald Trump’s economic policies.

Japanese investors bought a net 223.7 billion yen ($1.57 billion) worth of long-term foreign bonds during the week, marking their first weekly net purchase since the end of February, according to data from Japan’s Ministry of Finance.

U.S. Treasury yields have climbed this month as bonds sold off, with hedge funds unwinding leveraged basis trades and overseas investors selling U.S. debt in apparent retaliation for tariffs and amid growing doubts about the safe-haven status of U.S. assets.

Japanese investors are the largest holders of U.S. Treasuries, with approximately $1.13 trillion in holdings.

Meanwhile, overseas investors have been purchasing Japanese assets, driven by safe-haven demand and expectations that the Bank of Japan (BOJ) is likely to delay its interest rate hike to support the economy. They injected 11.95 trillion yen into Japanese bonds and 3.7 trillion yen into equity markets in the past three weeks, the data showed.

A Reuters survey of economists indicated that the BOJ is expected to hold its key interest rate through June, with only a slight majority anticipating a 25-basis-point hike next quarter, down from over two-thirds in last month’s poll.

At the same time, Japanese investors bought foreign equities worth about 610.4 billion yen in the week ended April 19, extending net purchases into a fifth successive week.

> ($1 = 142.7900 yen)

Japanese investors turned net buyers of overseas bonds last week

Japanese Investors Shift to Overseas Bonds

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Japanese investors turned net buyers of overseas bonds last week

Japanese Investors Shift to Overseas Bonds

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