Japanese investors sell big in European bond rout

Japanese investors who were directing funds towards European bonds seem to have taken the reverse course as early as in April.

• In first quarter of 2015, Japanese investors bought ¥5.64 trillion of foreign bonds. This was the highest purchase in a quarter since third quarter of 2012, when European bond market turned corner.

However, that changed pretty soon.

• In April alone, Japanese investors sold ¥2.17 trillion of foreign bonds, which is almost half of the purchase made in first quarter.

It is interesting to note Japanese investors ran out of Euro zone bonds, on eve of massive selloffs.

• Japanese investors sold ¥1.32 trillion of German bunds (most since March 2014).
• They sold ¥919 billion of French bonds (most since at least 1995.)
• Japanese investors also sold ¥245 billion of Austrian bonds.

 However, Japanese bought some bonds.

• Japanese investors bought ¥146 billion of Italian bonds making it fourth consecutive monthly purchase.
• They bought ¥115 billion of Belgian bonds and ¥76 billion of Finnish bonds.