Barclays note that "in Jun, Japanese..........>

JAPAN: Barclays note that "in Jun, Japanese investors turned buyers of

med/long-term foreign bonds, logging a net purchase of Y1,059bn. Banks & trust

banks bought a net Y591bn & Y55bn, respectively, returning to buying for the

first time in 6 months and 10 months, respectively, while life insurers switched

to selling for the first time in 4 months with a net sale of Y196bn. It appears

that demand spread among a broad range of investors after US long-term yields

reversed course from May, heading gradually lower after failing to stay >3%.

Japanese investors also bought heavily in foreign equities with a net purchase

of Y1,554bn overall, including Y488bn by banks, Y367bn by bank trust accounts

and Y172bn by life insurers - a wide range of investors. Based on weekly data,

Japanese investors sharply accelerated their investment in foreign equities in

the final week of June, logging their largest net purchase under comparable data

since FY01, likely reflecting demand from various investors, as noted above.

Meanwhile, overseas investors continued to sell Japanese equities for a second

consecutive month with a net sale of Y1,003bn, while logging net purchases of

Y4,385bn in short-term bonds and Y445 in medium/long-term bonds."