Foreign Investors Shift Focus: Navigating Japan's Market Amid Election Jitters
Foreign investors cautiously bought Japanese long-term bonds as yields rose with potential political shifts post-election. A net purchase of 170.4 billion yen was recorded in contrast to the previous week's sales. While they offloaded short-term bills, foreigners also increased equity investments amidst domestic political uncertainty and U.S. trade tensions.
Foreign investors showed cautious optimism by returning to Japan's long-term bond market in the week ending July 12, as political uncertainty loomed ahead of the upper house elections.
According to the Ministry of Finance, net purchases of 170.4 billion yen were realized, reversing a prior week of net sales. The yield on the benchmark 10-year bond climbed to 1.595%, reaching its highest level since October 2008.
Speculation swirled around potential political shifts, with polls indicating Prime Minister Shigeru Ishiba's coalition might lose its majority, compounding concerns over fiscal strains. While foreign investors increased holdings in Japanese stocks, domestic investors sold foreign equities amid volatile global conditions.
(With inputs from agencies.)
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