Key facts
- October's net foreign bond buying was the first since July, at 493.9 billion yen.
- Long-term foreign bond purchases of 457.2 billion yen were the most since May.
- Life insurers bought 62.3 billion yen of foreign long-term bonds, ending a four-month selling streak.
- Trust accounts bought 777.4 billion yen of foreign bonds while banks' net selling eased to 833.5 billion yen.
- Japanese investors have still sold a net 4.16 trillion yen of foreign debt holdings in 2026.
- A Bank of Japan report showed net sales of 6.06 trillion yen of US bonds in the first nine months of 2026.
Japanese investors bought a net 493.9 billion yen ($3.13 billion) of foreign bonds in October, Ministry of Finance data showed on November 10, their first monthly net purchase since July. The total included 457.2 billion yen of long-term bonds, the most since May, and 36.7 billion yen of short-term bills.
The shift came as the US 10-year Treasury yield, which reached 5.3645% on October 7, its highest since April 2002, fell 36.4 basis points over the month, its sharpest monthly decline since November 2023. Reuters reported that the move came as concerns over the Federal Reserve's policy outlook eased and markets grew wary of the AI boom's heavy capital spending, while selloffs in AI-linked technology stocks lifted demand for assets seen as safer.
Japanese investors also bought a net 1.46 trillion yen of foreign stocks in October, their largest monthly net investment since March. Despite the October purchases, they have sold a net 4.16 trillion yen of foreign debt holdings in 2026, which Reuters said has fueled speculation of capital shifting from overseas to domestic markets.
By investor type, life insurers bought 62.3 billion yen of foreign long-term bonds, ending a four-month selling streak. Trust accounts purchased 777.4 billion yen, while banks' net selling eased to a three-month low of 833.5 billion yen.
A separate Bank of Japan report showed Japanese investors sold 6.06 trillion yen of US bonds but bought a combined 719.49 billion yen of European bonds in the first nine months of 2026. They purchased 414.99 billion yen of Italian bonds, 376.9 billion yen of Spanish bonds and 265.28 billion yen of German bonds, while selling a net 317.28 billion yen of French bonds. The dollar was quoted at 157.9700 yen in the report's conversion rate.