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Foreign Investors Continue To Test BoJ, Also Offload Japanese Equities

JAPAN

The latest round of Japanese security flow data (covering 2 weeks owing to the recent round of Japanese national holidays) revealed an upscaling of net offshore bond selling by Japanese participants, although the net levels weren’t extraordinary, moving back above Y1.0tn in both of the weeks covered by the update (the first time net sales have been above that mark since July). This came as global core FI markets extended their weakness on a mix of hawkish central bank repricing and worry re: UK fiscal matters.

  • Japanese investors were small net buyers of foreign equities during both weeks.
  • Last week saw international investors lodge the largest round of net weekly sales of Japanese bonds since mid-June, after light net buying the week before, with the BoJ’s dedication to its YCC settings being tested amidst the wider pressure on core global FI markets. Notably, 20+-Year JGB yields have reached fresh cycle highs in recent sessions.
  • international investors have been net sellers of Japanese equities for 5 consecutive weeks, registering the largest round of net weekly selling net selling since Nov ’20 in the most recent week.
Latest WeekPrevious Week4-Week Rolling Sum
Net Weekly Japanese Flows Into Foreign Bonds (Ybn)-1102.5-1206.1-2298.9
Net Weekly Japanese Flows Into Foreign Stocks (Ybn)264.8200.8535.2
Net Weekly Foreign Flows Into Japanese Bonds (Ybn)-2862.8556.7-4761.2
Net Weekly Foreign Flows Into Japanese Stocks (Ybn)-1178.9-310.6-2802.9
Source: MNI - Market News/Bloomberg/Japanese Ministry Of Finance
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The latest round of Japanese security flow data (covering 2 weeks owing to the recent round of Japanese national holidays) revealed an upscaling of net offshore bond selling by Japanese participants, although the net levels weren’t extraordinary, moving back above Y1.0tn in both of the weeks covered by the update (the first time net sales have been above that mark since July). This came as global core FI markets extended their weakness on a mix of hawkish central bank repricing and worry re: UK fiscal matters.

  • Japanese investors were small net buyers of foreign equities during both weeks.
  • Last week saw international investors lodge the largest round of net weekly sales of Japanese bonds since mid-June, after light net buying the week before, with the BoJ’s dedication to its YCC settings being tested amidst the wider pressure on core global FI markets. Notably, 20+-Year JGB yields have reached fresh cycle highs in recent sessions.
  • international investors have been net sellers of Japanese equities for 5 consecutive weeks, registering the largest round of net weekly selling net selling since Nov ’20 in the most recent week.
Latest WeekPrevious Week4-Week Rolling Sum
Net Weekly Japanese Flows Into Foreign Bonds (Ybn)-1102.5-1206.1-2298.9
Net Weekly Japanese Flows Into Foreign Stocks (Ybn)264.8200.8535.2
Net Weekly Foreign Flows Into Japanese Bonds (Ybn)-2862.8556.7-4761.2
Net Weekly Foreign Flows Into Japanese Stocks (Ybn)-1178.9-310.6-2802.9
Source: MNI - Market News/Bloomberg/Japanese Ministry Of Finance