JAPAN DATA: Local Investors Cool Offshore Debt Purchases

Local investors slowed their purchases off overseas debt, with net selling of -¥222.6bn bonds last week. This was the first week of net selling in this segment since the tail end July. Up until the end of August we had seen just under ¥7.3trln in domestic purchases of overseas debt. Momentum still appears positive into this space given the global fixed income backdrop and some decline in hedging costs. Local investors purchased offshore equities for the fourth straight week (¥496.5bn). 

• In terms of flows into Japan bonds/equities, offshore investors remains net sellers of local equities. This was the fourth consecutive weekly outflow and the largest single weekly outflow since mid March. As we noted last week, this remains consistent with other tech sensitive countries.
• Offshore investors did purchase local bonds last week, but this only partially reversed the prior week's outflow. 

Table 1: Japan Weekly Investment Flows 

Source: MNI - Market News/Bloomberg