Picking apart MOF/Current Account data from...>

BONDS: Picking apart MOF/Current Account data from yesterday shows that Japanese

banks turned net sellers of overseas bonds in January after flipping to

purchases in December. Banks were net sellers of bonds to the tune of Y343bln.

However the biggest accounts, financial instruments firms and life insurance

companieswere once again net buyers of bonds to the tune of Y840bln and

Y1.049tln respectively. The flip from Japanese lifers in particular is notable

after being net sellers in November and December, the January figure represents

the highest purchase since August 2016. This sort of demand in January is

unusual and could be due to some bargain hunting for US bonds as prices sink and

yields rise.

- Other data showed that over 2017 as a whole Japanese investors were sellers of

US bonds, indicating flows into corporate bonds. Japanese accounts were net

sellers of Y2.2tln of US bonds, but purchased a net Y836.3bln of Aussie bonds.