Overseas Investors Offload Most Japan Bonds Since at Least 2014

(Bloomberg) -- Overseas investors cut their holdings of Japanese bonds at the fastest pace since at least 2014 last week as debt matured.

They sold a net 2.8 trillion yen ($28 billion) in bonds during the week ended Sept. 23, the most since at least the start of 2014, according to Finance Ministry data Thursday. It was the third consecutive week that non-Japanese investors, who hold about 5 percent of the nation’s government bonds, pared their holdings.

“Government bond redemptions on Sept. 20 played a major role in overseas investors’ net selling last week,” said Shuichi Ohsaki, chief Japan rate strategist at Bank of America Merrill Lynch in Tokyo.

Ten-year yields, which were at minus 0.08 percent as of 10:30 a.m. in Tokyo, have dropped since turning positive for the first time since March on Sept. 21, the day the Bank of Japan said it would like to keep yields near zero.

“I don’t think the investment stance of foreigners greatly changed after the BOJ’s policy meeting,” Ohsaki said.

--With assistance from Masaki Kondo To contact the reporter on this story: Yumi Ikeda in Tokyo at yikeda4@bloomberg.net. To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net, Naoto Hosoda, Tomoko Yamazaki

©2016 Bloomberg L.P.