Japanese investors have been net sellers of foreign bonds for two consecutive months, with this year's outflow reaching the highest level since 2022.

智通财经2026/10/08 05:36

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(1) In September, Japanese investors were net sellers of foreign bonds for the second consecutive month, as rising borrowing costs in the United States and Europe, along with increasingly attractive domestic yields, prompted them to withdraw from overseas bond markets. (2) Data from Japan's Ministry of Finance on Tuesday showed that last month, Japanese investors had a net sale of 969 billion yen (6.13 billion USD) in foreign bonds, lower than the net sale of 1.16 trillion yen in the previous month. Among these, they net sold 1.43 trillion yen in long-term foreign-currency bonds, marking a six-month high, while buying approximately 457 billion yen in short-term notes. (3) Rising Japanese interest rates have begun to attract a portion of the large overseas investments back to the country, signaling a significant shift in global capital flows. So far this year, Japanese investors have net sold around 5.08 trillion yen in foreign bonds, the highest since 2022. This outflow of funds could support the yen's exchange rate and put pressure on bond markets, where Japan has long been a major buyer. (4) The surge in energy costs has intensified inflation concerns, prompting the Federal Reserve and the European Central Bank to raise interest rates in September, further pressuring global bond markets. Earlier this week, Japan’s benchmark 10-year government bond yield climbed to 3.122%, the highest in 30 years, bolstering the appeal of domestic bonds. (5) In September, led by the Bank of Japan, Japanese entities were net sellers of long-term foreign bonds with a total net sale of 2.49 trillion yen, the highest in seven months. Life insurance companies and investment trust management firms also recorded net sales of 288.6 billion yen and 200.1 billion yen, respectively. However, trust accounts net purchased 1.2 trillion yen of long-term foreign-currency bonds, highlighting divergent investment strategies among Japanese institutional investors. (6) Another report from the Bank of Japan showed that, in the first eight months of this year, Japanese investors net sold 4.74 trillion yen of US Treasuries while net purchasing 355.85 billion yen of European bonds. Within Europe, Japanese investors net purchased 329.82 billion yen of Italian bonds, while net selling 208.59 billion yen of French bonds and 94.25 billion yen of German bonds.

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