Foreign Investors Dump Japanese Bonds On BoJ Test & Ahead Of Japan FY End

The latest round of weekly MoF international security flow data revealed that Japanese investors were net sellers of foreign bonds for the fifth consecutive week last week, although the net volumes observed were not particularly sizable. Elsewhere, Japanese investors were marginal net buyers of foreign equities during the week. Wider net volumes on the part of Japanese investors re: international security flows were likely constrained by the proximity to the end of the Japanese FY.

• The data also revealed that foreign investors executed the largest weekly round of net selling of Japanese bonds since December 2020, with the usual round of notable net selling at Japanese FY/half FY end playing out, likely exacerbated by the test of the BoJ’s permitted 10-Year JGB yield trading band. Meanwhile, there was another downtick in the size of net selling of Japanese stocks on the part of foreign investors, with a ninth straight week of net sales lodged there.