Japanese investors sell foreign bonds for a fifth straight week

Japanese investors sold a net ¥161.6 billion ($1.02 billion) of foreign long-term bonds in the week through October 17, according to Japan’s Ministry of Finance data reported on October 22. It was their fifth consecutive week of net selling, the longest run in four years.

The selling comes after Japan’s benchmark 10-year government bond yield rose by more than 80 basis points, or 0.8 percentage points, this year. A yield measures a bond’s return at its market price. Recent buying by investors seeking safety had pulled the yield below the three-decade high it reached in October.

Selling slows, but the five-week total grows

The latest weekly sales were the smallest in the five-week run. They nevertheless brought year-to-date net sales to the largest total for the comparable period since 2022. Net sales measure how much sales exceed purchases.

Banks lead the selling; insurers’ plans are next

Domestic Japanese banks have led this year’s selling, CNA reported. The report described the disposals as a possible shift toward Japanese government bonds as domestic yields rise. The aggregate flows do not identify where all sale proceeds went or establish life insurers’ allocations.