Japanese investors sell euro zone bonds at the fastest speed in the past ten years

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Japanese investors have been selling the euro zone government bonds at the fastest speed in more than a decade. Analysts warn that the actions of one of the cornerstone bonds of the euro zone may lead to a large market for sale.

According to data from the Ministry of Finance and the Bank of Japan based on Goldman Sachs, as of the six months of November, the net sales of Japanese investors increased to 41 billion euros (the latest data for release).

Analysts said that the prospects for rising domestic bond yields and European political turmoil -including the collapse of the German ruling alliance, which led to the election of next month, and the turmoil of France operated according to the emergency budget algorithm -accelerated sales. French bonds are the largest sales bonds during this period, reaching 26 billion euros.

This time, the European government, which has faced the liabilities of borrowing costs, has brought further pressure, and highlights that Japan ’s interest rates have continued to increase the global financial market after many years of negative value.

Alain Bokobza, head of the global asset allocation of French Industrial Bank, said that Japanese investors returning to China are the “changes in game rules in Japan and the global market.”

Although Japanese investors have been the net seller of the euro zone bonds most of the past few years, this pace has accelerated in recent months.

Japan’s investment flow has always been a “stable source” [European] Tomasz Wieladek, an economist at the asset management company T Rowe Price, said: “Government bond demand will exist for a long time.” But the market is now “entering the bond warning era” and “fast and fierce selling” may occur more frequently.

Royal London Asset Management Manager Gareth Hill, manager of Bonds, said that this situation “has long been a concern for European government bond holders because the holdings are in history. “High” [among] Japanese investors may put pressure on the market.

In addition, the risk aversion cost of fluctuations in the yen is soaring, making overseas debt more and less attractive. Noriaatsu Tanji said that although the peak of 2022 fell, considering the cost of hedging, the yield of the 10 -year Italian bond of Japanese investors was still slightly higher than 1%, which was roughly the same as the Japanese 10 -year public debt yield rate of Ruisui, Tokyo. Strategiers of Securities Chief Bond. He pointed out that Japanese banks are one of the main sellers of European debt.

“Japanese investors must ask themselves very seriously. To what extent they should hold foreign bonds,” in Europe, the largest asset management company, PicTET, global bond director, Andreis Sanchez Balcat ( Sanchez Balcazar said.

Nonglin Zhongjin, one of the largest institutional investors in Japan, said last year that it plans to sell foreign bonds with more than 10 trillion yen in the fiscal year. In November, losing losses due to holding a large number of foreign government bonds, the loss in the second quarter was about $ 3 billion.

Analysts said that the withdrawal of Japanese investors brought upward pressure on bond yields. Since the European Central Bank has implemented a large -scale emergency bond purchase plan during the crown virus popularization, the bond yield has risen.

France is one of the deepest bond markets in Europe. As the yield provided by it is higher than the German benchmark bonds, it has always been the favorite of Japanese investors.

From June to November, with the deepening of the political crisis that caused the Michelle Baniey government to fall, the total flow of Japanese funds reached 26 billion euros, and the sales of the same period last year were only 4 billion euros.

SEAMUS Mac Gorain, the global interest rate director of Morgan Chase Asset Management, said: “There is no doubt that the foundation of French buyers has changed.”

In the past 20 years, Japanese investors have become the cornerstone investors in multiple bond markets, because domestic ultra -low yields have made foreign investment more attractive, including large investors such as retirement funds who need to purchase security sovereignty debts.

According to data from the International Monetary Fund, the total amount of foreign bonds held by Japanese institutional investors reached a peak of $ 3 trillion at the end of 2020.

However, as Japanese investors have begun to seek rewards in China, their total net purchase of global debt securities has reduced to only 15 billion US dollars in the past five years, and it is far from their purchase volume of about $ 500 billion in 2017 Essence

JP Morgan’s Gorain said, “Although Japanese bonds have not attracted domestic investors in the past, they are more attractive now.” “This is a structural change.”