JAPANESE investors net sold foreign bonds for the second consecutive month in July, deterred by declining US bond yields amid heightening expectations of an imminent Federal Reserve rate cut to support the faltering economy.
According to data from Japan’s Ministry of Finance, they offloaded 1.49 trillion yen ($10.12 billion) in long-term overseas bonds following a substantial net disposal of 3.35 trillion yen in the previous month, and also shed approximately 17 billion yen in short-term instruments.
Meanwhile, domestic investors bought a net 724.2 billion yen in foreign equities last month, reversing two consecutive months of net selling, according to the data.
Barclays noted that the recent inflows largely continue the trend of significant purchases by investment trusts since the beginning of the year, likely fueled by new Nippon Individual Savings Account flows, coupled with a cessation of substantial sales by trust accounts due to yen appreciation and a stalled equity rally.
Data revealed that investment trust management companies acquired a significant 1.14 trillion yen in overseas equities, marking their largest monthly net purchase since January.
Conversely, banks and life insurers sold a net of 466.4 billion yen and 15.2 billion yen worth of overseas stocks, respectively.
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