Japanese investors net sold 3.07 trillion yen of overseas bonds in February, hitting a 16-month high

Gate News reports that on March 9, Japanese investors withdrew heavily from the overseas bond market in February, with a net sell-off of 3.07 trillion yen ($193.7 billion), reaching a 16-month high. This was mainly due to falling U.S. Treasury yields and rising Japanese government bond yields, making local bonds more attractive. According to the Japanese Ministry of Finance, last month Japanese investors sold 3.42 trillion yen worth of foreign long-term bonds, a 16-month high, while simultaneously net purchasing about 352.1 billion yen of foreign short-term bonds. Additionally, in February, Japanese investors net bought 642.1 billion yen of foreign stocks for the second consecutive month. Barclays pointed out that this round of buying was primarily driven by demand related to Japan’s personal savings accounts (NISA, a government-initiated tax-free stock investment plan). Another report from the Bank of Japan indicated that in January, Japanese investors net purchased 279.4 billion yen of U.S. Treasuries and 660.96 billion yen of European bonds.