Foreign Inflows Surge as Japan Awaits BOJ Policy Decision

In the lead-up to the Bank of Japan's policy decision, foreign investments in Japanese long-term bonds saw an eight-month high, with a net influx of 1.41 trillion yen. Additionally, foreign interest in short-term bills and stocks grew, reflecting economic anticipation and strategic market shifts.

Ahead of the Bank of Japan's policy announcement, foreign investments in Japanese long-term bonds soared to an eight-month peak, with investors injecting a net 1.41 trillion yen. This marks the largest influx since April, as detailed by data from Japan's Ministry of Finance.

Foreign investment extended to Japanese short-term bills, which saw an inflow of 452.4 billion yen. Meanwhile, reports of increased government spending plans elevated the yield on 10-year government bonds to its highest level since 2007, indicating economic unease as investors await potential interest rate adjustments.

The Bank of Japan is poised to potentially raise rates to a three-decade high, with BOJ Governor Kazuo Ueda set to outline future policy directions. The foreign investment interest was mirrored in the stock market, with foreigners adding 528.3 billion yen in stocks, even as the Nikkei index temporarily declined amid a technology stock selloff.

(With inputs from agencies.)