Japan’s Weekly Capital Flows: Foreign Bond Buying Turns Negative

Japan’s latest weekly capital flows data (excluding June 5) reveal notable shifts. Japanese investors turned net buyers of foreign bonds, purchasing ¥197.5 billion, compared to net selling of ¥184.8 billion the prior week. However, they continued to sell foreign stocks, albeit at a slower pace, with net outflows of ¥943.6 billion versus ¥1,072.0 billion.

Foreign investors reversed their stance on Japanese bonds, recording net selling of ¥1,038.5 billion after net buying ¥1,245.8 billion previously. Foreign selling of Japanese stocks also deepened to ¥701.0 billion from ¥491.2 billion.

The data indicates a change in cross-border investment preferences, with foreign bond demand weakening and Japanese institutions shifting toward foreign fixed income.