Japanese investors dump Eurozone bonds at fastest pace in a decade

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Japanese investors sell the state debt of the eurozone at the fastest pace in the last more than a decade, and analysts warn that the step of one of the owners of the block can lead to sharp market sales.

According to the Japanese Bank, Japan’s Bank, Japan’s US Department of Finance and Japan has increased to 41 billion euros in six months.

The prospect of higher yields in domestic bonds and political shocks in Europe, including the collapse of the ruling coalition in Germany, and the confusion in France, which operates in France, accelerated sales, analysts say. . The French bonds were most sold at that time – 26 billion euros.

Sales put extra pressure on European debt governments, which are already facing borrowing costs, and emphasize how Increasing Japanese interest rates Years later, the financial markets in the negative domain transform them all over the world.

Japanese investors who return home, “the game is changing the game for Japan and global markets,” said Alen Bokobzan, head of the Société Générale’s global asset distribution.

Although Japanese investors have been net sellers of eurozone bonds over the past few years, the pace has increased in recent months.

Japanese investment flows have been “Sustainable Source [European] The demand for government bonds has long, “said Tomasz Vieladek, Tomasz Vieladek, Tomasz Vieladek. However, markets now “entering the age of bonds”, where “fast and violent sales” can occur more often.

Royal London Asset Management Fund Manager Gareth Hill says that the scenario “was concerned about the owners of European government bonds for a long time, taking into account historically high. [among] Japanese investors “and can put pressure on the market.

In addition, the growing costs of hedging expenses from the value of the yen have made more unattractive expenses abroad. Despite the top of the 2022, the yield of 10-year-old Italian government bonds for Japanese investors is one more than 1%, which is about the same as the 10-year Japanese yield, according to the Norichi Taghi. : Mizuho Securities bonds in Tokyo. He noted that the Japanese regional banks are one of the main sellers of the European debt.

“Japanese investors must ask themselves to strictly ask themselves to foreign bonds,” said Andres Sanchez Balkazar, the head of the World Pictuna’s major assets.

Norinchkin, one of the largest institutional investors in Japan, said last year that it plans to unload more than 10 trillion and foreign bonds in this fiscal year. In November, it recorded about $ 3 billion damage in the second quarter after its large reserves of foreign government bonds.

The reciption of Japanese investors is up to the yield of bonds, which have already risen after the European Central Bank began reducing its balance after the huge amount of bonds in the coronaryaval epidemic, say analysts.

France, which has one of the deepest bonds in Europe and has historically been popular among Japanese investors, and has seen a large Japanese leak in recent months.

From June to November, when the political crisis became deepened, the total outflow of the Japanese funds reached 26 billion euros compared to only 4 billion euros in the same period last year.

“There is no doubt that the buyers’ base has changed for France,” said James Mak Goray, the head of the global interest rates on JPMorgan Asset.

Over the past 20 years, Japanese investors have become a cornerstone in several markets, as extremely low yields in the country have made foreign investments more attractive, including large investors, such as pension funds, who should buy a secure sovereign debate.

The general behavior of foreign bonds by Japanese bonds reached $ 3 trillion, at the end of 2020, according to the IMF.

However, since Japanese investors have started returning home, their net purchase of world debt securities has decreased to $ 15 billion over the past five years, which is far from about $ 500 billion. The previous five years, according to Exants, Macrital Alex Etra calculations.

“If Japanese bonds were not previously attractive for internet investors, they are now more attractive,” says JPMorgan’s Gorain. “This is a structural change.”