What Japanese Investors Bought
Marc Chandler | May 15, 2013 05:09AM ET
Country specific data on Japanese portfolio capital outflows is lagged, like the US TIC data, by two months. The March data was recently released. This from Bloomberg shows Japanese investors bond purchases between US Treasuries (green), French bonds (red) and Australian bonds (blue).
One of the key take aways is the Japanese appetite for French bonds, of which they have been consistent buyers of over the last 16 months, adding another $2.3 bln worth in March. In contrast, Japanese investors have been sellers of US Treasuries and Australian bonds in in five of the past six months.
The fact that French bonds continue to trade like somewhat higher yielding bunds trumps the growing divergence between the two pillars of Europe The interest by Japanese investors helps explain why French bonds have fared so well and why French bonds not JGBs rallied the most when the BOJ announced its quantitative and qualitative easing in early April.
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