Japanese investors' foreign bond selling hits fifth week, longest streak since 2022

Japanese investors sold foreign bonds for a fifth ​straight week through October 17, their ​longest selling streak since November ‌2022, but ​the pace slowed as US Treasury yields eased from 24-1/2-year highs. They sold a net 161.6 billion yen ($1.02 billion) of ‌foreign long-term bonds, the smallest amount of the streak, alongside 156.9 billion yen of short-term bills, Japan’s Ministry of Finance data showed.

The latest sales brought their cumulative net disposals of foreign long-term bonds ‌over the five weeks to about 3.43 trillion yen, taking year-to-date net sales ‌of long-term bonds to 5.18 trillion yen, the largest for the comparable period since 2022. The benchmark 10-year US Treasury yield, which reached a 24-1/2-year high of 5.3645% earlier this month, has since retreated by roughly 27 basis ⁠points.

Meanwhile, ​the 10-year French government ⁠bond yield climbed to a 24-year high of 5.022% on Wednesday amid concerns over widespread protests in France. Domestic ⁠banks have led this year’s selling, while life insurers have signalled plans to maintain or increase ​their domestic bond purchases in the second half of the fiscal year.

In overseas equity ⁠markets, Japanese investors made net purchases of 128.3 billion yen in foreign stocks, marking their fifth weekly net ⁠buying ​in the past six weeks. Meanwhile, foreign investors were net buyers of Japanese long-term bonds for a third consecutive week, purchasing a net 1.45 trillion yen during the week. ⁠However, they sold 2.24 trillion yen of short-term bills, the largest weekly disposal in three weeks.

In ⁠Japanese equity markets, ⁠foreign investors were modest net sellers of 66.5 billion yen, following massive net purchases of 3.55 trillion yen in the previous week. ($1 = ‌157.9100 yen)