In anticipation of a critical move by the Bank of Japan (BOJ) to exit negative interest rates after 17 years, foreign investors continued to accumulate Japanese bonds for the third consecutive week. This move came ahead of the anticipated action.
According to information provided by the Ministry of Finance, they invested a staggering 2.16 trillion yen, which is equivalent to $14.26 billion, in long-term Japanese bonds on a net basis last week.
This was the most amount that they had invested in a single week since the middle of March 2023. For the first time in seventeen years, the Bank of Japan (BOJ) raised interest rates on Tuesday, marking the beginning of a new era of monetary policy.
This decision was widely anticipated, and it marked the end of the BOJ's negative rate policy. In the meantime, the yield on 10-year Japanese government bonds has decreased by approximately 4.3 basis points so far this week as a result of the Bank of Japan's (BOJ) bond buying as part of its money market operations and its unplanned asset repurchases up to 3 trillion yen.
According to the statistics provided by the exchange, foreign investors sold around 674.22 billion yen worth of Japanese stocks during the previous week. This represents the greatest weekly divestiture since October 6, 2023's trading session.
In spite of the fact that the Nikkei share average (.N225) saw a decline of 2.47% over the course of the previous week, it experienced a significant rebound, increasing by 5.6%, and reaching a record high of 41,087.75 on Friday.
On a net basis, foreign investors sold cash shares and futures worth around 87.52 billion yen and 586.7 billion yen, respectively, over the previous week.
After making two consecutive weekly net purchases of long-term foreign bonds, Japanese investors withdrew a total of 803.9 billion yen from their holdings of these bonds last week. On the other hand, they acquired approximately 305.1 billion yen worth of the short-term debt securities.
follow for more updates