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Goldman Sachs note that "recent Japan flows data continue to reflect a couple key themes we've been highlighting. First, much of the recent demand for foreign fixed income has come from Japanese trust accounts under a backdrop of firm equity market performance. Mirroring these inflows is an almost equivalent amount of net sales of equity and investment fund shares. Taken together, this suggests a continuation of portfolio rebalancing flows as trust accounts try to match bond allocation targets. Looking at a country level split, the largest beneficiaries of Japanese fixed income demand continue to be the US and Australia, with inflows into the former accelerating in November according to the latest BoP report. While portfolio rebalancing has likely been the driving factor to date, looking ahead we expect increasingly attractive yield differentials on both an outright and FX hedged basis to drive additional demand for foreign bonds, namely USTs in the year ahead. Should this materialize, JGBs could lose more support. We therefore see this as another factor, together with vaccine rollout and a firmer global growth trajectory, supportive of modestly higher JGB yields and a steeper long-end JGB curve."