Offshore & Local Investors Continue To Sell Bonds

Japan offshore investment flows were mixed in the final week of June. Offshore investors continued to sell local bonds, albeit at a reduced pace compared to the prior week, see the table below. The trend remains for outflows form this space. We saw net outflows in 3 out of 4 weeks in June, while Q2 as a whole saw
-¥3233bn in net outflows. Expectations around higher BoJ tapering bond buying plans may be headwinds for flows in this space.

• Offshore investors purchased local equities to the tune of ¥185.3bn. Net flows for the whole of June were still negative though.
• In terms of Japan outbound flows, we saw local investors continue to sell offshore bonds. June as a whole saw firm selling in this segment and this was the general trend through Q2.
• On the equity front, local investors sold offshore equities last week.

Table 1: Japan Weekly Investment Flows

Source: MNI - Market News/Bloomberg