JGB outflows hit a 7-week high on inflation, fiscal worries

Elsewhere, Japanese investors bought a net 758.7 billion yen of foreign long-term bonds as they remained ⁠net buyers for a third straight week. They also added a net 41.4 ⁠billion yen ⁠of foreign equities after divesting a combined 3 trillion yen of shares in the preceding two weeks.

Japanese government bonds (JGBs) recorded the ​largest weekly foreign outflow ​in seven weeks in the ‌week to ​May 16, driven by inflationary pressures and fiscal strains due to an energy ‌shock. Foreigners sold a net 1.03 trillion yen ($6.48 billion) of Japanese long-term bonds in their largest weekly sale since March 28. They also withdrew ‌804.6 billion yen from short-term bonds, data from the Ministry ‌of Finance showed on Thursday.

The 10-year JGB yield touched its highest levels since 1996 this week as Japan islikely to issue fresh debt to fund ⁠an ​extra budget to ⁠cushion the economic blow from the Middle East war and higher oil ⁠prices. Last week's inflation report bolstered bets of rate hikes by the Bank ​of Japan, weighing on investor sentiments.

Foreigners, meanwhile, extended their ⁠recent buying streak in equities into a seventh straight week with a net ⁠949.6 billion ​yen of weekly purchases. Elsewhere, Japanese investors bought a net 758.7 billion yen of foreign long-term bonds as they remained ⁠net buyers for a third straight week.

They also added a net 41.4 ⁠billion yen ⁠of foreign equities after divesting a combined 3 trillion yen of shares in the preceding two weeks. ($1 = ‌158.9600 ‌yen)