© . FILE PHOTO: This illustration photo, taken on June 1, 2017, shows a Japanese yen bill. banks and its impact on global equity and bond markets. Domestic investors have sold a total of 1.58 trillion yen ($13.72 billion) worth of foreign bonds and stocks this year, according to data from Japan’s Ministry of Finance as of late last week. They sold 385 billion yen in stocks and 1.2 trillion yen in bond markets, the data showed. Total sales of 1.58 trillion yen have already surpassed last year’s total sales of 1.5 trillion yen. (Images: https://fingfx.thomsonreuters.com/gfx/mkt/mypmnjynevr/Japanese%20investments%20in%20overseas%20assets.jpg) As the major central banks move toward fighting inflation and their ultra-low borrowing costs, the Bank of Japan (BOJ) is in no rush to follow suit. Inflation in Japan remains a long way from the BOJ’s 2% target, Deputy Governor Masazumi Wakatabe said earlier this month. “Thanks to the combined effect of rising global interest rates, Japanese government bonds (JGBs) now offer more attractive returns for local investors,” said Antoine Bouvet, senior interest rate strategist at ING, in a report. “Combined with the risk of larger losses on US dollar and euro-denominated bonds, this could make JGBs an increasingly attractive alternative.” Analysts also said currency hedging costs for domestic investors have risen due to the rise in interest rates in foreign markets. Another reason for the decline in Japanese foreign equity investments is the relatively larger declines in overseas markets. The index is down 5% this year, compared to the MSCI World’s 6% fall. Last year, Japanese investors sold 3.61 trillion yen worth of US stocks, but bought US bonds worth 6.85 trillion yen. At the same time, they sold stocks and bonds worth 538 billion yen and 1.76 trillion yen respectively in the European Union. (Images: https://fingfx.thomsonreuters.com/gfx/mkt/xmpjojyodvr/Japanese%20investments%20in%20US%20and%20European%20assets.jpg) ($1 = 115,1800 yen) Disclaimer: Fusion Media wants you to Remember that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data. Fusion Media or anyone associated with Fusion Media accepts no liability for any loss or damage resulting from reliance on any information, including data, quotes, charts and buy/sell signals on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.
