Global Investors Flock to Japanese Bonds Amid Tariff Tensions

Japanese bonds witnessed significant foreign investment as safe-haven demand surged due to concerns about U.S. tariffs and potential delays in Japan's interest rate hikes. Data shows substantial inflows into long-term and short-term Japanese bonds, highlighting foreign investors' confidence amidst global economic uncertainties.

Japanese bonds have become a magnet for international investors, with significant inflows marking a second consecutive week of robust foreign interest. This uptick in investment is largely fueled by safe-haven demand amidst growing concerns over U.S. tariff impacts and potential delays in Japan's anticipated interest rate hikes.

Data from Japan's Ministry of Finance revealed that foreign investors net purchased long-term Japanese bonds worth 2.3 trillion yen in the week ending April 12, following a 2.8 trillion yen influx the previous week. Additionally, overseas investors directed 2.08 trillion yen into Japanese short-term bills.

The 10-year Japanese government bond yield saw a decline to a three-month low, influenced by tariff dynamics, while Japanese stocks experienced a modest recovery. Meanwhile, Japanese investors significantly reduced their net foreign stock acquisitions, highlighting a cautious approach amid global market volatility.

(With inputs from agencies.)