Japan's net sale of foreign bonds in June biggest in two years
July 8 (Reuters) -Japanese investors sold foreign bonds in June, as U.S. Treasury bond yields dropped on hopes that the Federal Reserve would cut rates soon amid cooling price pressures.
Domestic investors offloaded a net 3.93 trillion yen ($24.42 billion) worth of foreign bonds last month, their largest monthly net selling since June 2022, as per Japan's Ministry of Finance data.
They sold about 3.35 trillion yen worth of long-term overseas bonds, registering there largest monthly net disposal in two years. They also pulled a net 574.8 billion yen from short-term debt instruments.
Barclays said the large sales in foreign assets last month was due to pension rebalancing on the back of equity rally and yen depreciation.
Simultaneously, domestic investors withdrew about 1 trillion yen out of foreign equities as they extended net selling into a second successive month.
Japanese banks ditched a noticeable 2.85 trillion yen worth of long-term foreign bonds, which was their biggest monthly net selling since June 2022. Trust accounts, meanwhile, remained net sellers for a third straight month, with about 207.5 billion yen in net sales.
Conversely, insurance companies bought 182.8 billion yen worth of long-term securities, in contrast to 133.4 billion yen worth of net selling, a month ago.
In May, Japanese investors had acquired about 3.2 trillion yen worth of U.S. bonds. They, however, sold British and European bonds of 48 billion yen and 31 billion yen, respectively, Bank of Japan data showed.
($1 = 160.9400 yen)
Japanese investments in overseas assets (monthly) https://tmsnrt.rs/41cPIPX
Japanese investments in U.S. and European assets (monthly) https://tmsnrt.rs/3ZXC1n7
Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Arun Koyyur
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