JAPAN DATA: Local Investors Continue To Buy Offshore Debt

The key feature of the weekly offshore Japan investment flow update was the continued surge in local purchases of offshore debt. We saw ¥1640.5bn in fresh inflows into this space by the local Japan investors base. This brings August flows to offshore bonds to over ¥7trln. As we noted last week, the shift in the global monetary policy outlook, particularly the Fed, is improving global bond returns (while also lowering hedging costs for domestic Japan investors). 

• Japan investors also continued to purchase offshore equities with a further ¥384.7bn in purchases into this segment.
• In terms of offshore investors, they sold local bonds, the first such sale since the start of August. Offshore investors also sold Japan equities, continuing the outflow trend that started in mid July. This accords with other tech sensitive markets, where outflow pressures have been evident (particularly Taiwan in recent months). 

Table 1: Japan Weekly Investment Flows

Source: MNI - Market News/Bloomberg