Japanese bond investors bought a hefty........>

JAPAN: Japanese bond investors bought a hefty Y1.62tn worth of foreign bonds in

the week to Nov 09. While Japanese names bought more foreign bonds in one week

during August, the purchase seems outsized on a seasonal chart, representing the

largest foreign bond purchase by Japanese names in the month of November over a

5-Year horizon, well above the November average over that time. This comes at a

time when 10-Year U.S. Tsy yields on an FX hedged basis are unattractive to

Japanese investors vs. 10-Year JGBs, owing to USD hedging costs, while 30-Year

JGB yields now exceed the French 10-Year FX hedged yield for a Japanese

investor. This perhaps points to growth in unhedged foreign bond holdings, which

some of the larger lifers & pension funds alluded to in their semi-annual

investment guidance plans, announced late October.

- Japanese investors also shed their foreign stock holdings during the latest

week covered by the data. The sales amounted to a level not observed in the

month of November since 2014.

- Chart: Japanese Weekly Int'l Bond Flows: https://tinyurl.com/ycoehzoe

- Chart: Japanese Weekly Int'l Equity Flows: https://tinyurl.com/y7r5w9gr