Japanese investors return to overseas bonds as stronger yen, higher yields boost demand

Japanese investors were net buyers of foreign bonds for the first time in three weeks, as a stronger yen following U.S.-Japan intervention and elevated overseas yields supported demand.

Japanese investors bought a net 477.9 billion yen ($3.03 billion) in foreign long-term bonds ‌in ⁠the week ⁠ended August 1 as well as a net 424.7 billion ​yen in short-term bills in their first weekly net purchases since ​July 11, data from Japan's Ministry of Finance showed.

The yen's roughly 3.98% rise against the U.S. dollar ​last week boosted Japanese investors' purchasing power. ⁠The currency gained ‌after Japanese and U.S. authorities ​intervened in currency ​markets, following its slide to a ⁠40-year low in the previous week.


Japanese investors have ​sold a net 2.84 trillion yen in foreign ​long-term bonds so far this year, despite last week's buying, compared with 9.57 trillion yen in net purchases over the same period last year.

Japanese investors, meanwhile, divested a net 276.4 billion yen from ‌foreign stocks, nearly reversing net purchases of 289.1 billion yen in the prior week.

At the ​same time, ​foreign investors ⁠bought a net 558.9 billion yen of Japanese long-term bonds-their first weekly net purchase since July 11. Japanese short-term bills, ​however, recorded a fourth consecutive weekly outflow of 292.9 billion yen.

Foreign investors withdrew a net 392.5 billion yen from Japanese stocks, following net purchases of 912.4 billion yen in the prior week.