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Monitor: Japanese Investor Flows‏

ByDanske Markets
Published 08/21/2013, 06:56 AM
Updated 05/14/2017, 06:45 AM

Japanese investors again became the major net buyers of foreign bonds in July and early August. Up until June Japanese investors had been substantial net sellers of foreign bonds, as the latest detailed data is from June, it is not yet possible to say how the significant shift in July and early August has affected investor flows into specific countries. In June the investment pattern remained broadly similar to the previous months with Japanese investors mainly selling US treasuries and purchasing euro area bonds slowing. Interestingly, net sales of emerging market bonds intensified in June with Japanese investors being net sellers of ASEAN bonds for the first time this year and continuing to sell Brazil and Mexico.

The pattern in investments within the euro area also remained broadly the same In June. Japanese net purchases of euro area bonds have mainly benefited France and the Netherlands so far this year, but these purchases have slowed markedly in recent months as overall bond purchases have been scaled back. Until June there have been no signs that Japanese investors are returning to PIIGS, but it will be interesting to see if this pattern has changed after Japan again turned into a major net buyer of foreign bonds in July and early August.

In Scandinavia the most noteworthy point is that Japanese investors have been substantial net sellers of Norwegian bonds, although June data suggests that sales of Norwegian bonds are now slowing.


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