Japanese Investors Become Net Buyers of Foreign Long-Term Bonds for First Time in Seven Weeks After Tech Stock Selloff
nashnova research
In the week to October 31, Japanese investors net-purchased ¥1.31 trillion in foreign long-term bonds, ending six straight weeks of net selling, as a tech-stock selloff and the Fed's decision to hold rates steady pushed capital back toward safe-haven duration.
Why did six weeks of selling suddenly reverse?
Over the prior six weeks, Japanese investors had net-sold ¥3.51 trillion in foreign long-term bonds, driven by rising energy costs and government-debt concerns that weighed on risk appetite.
The turning point came last week: disappointing earnings from several tech giants cooled the AI trade, and the Nasdaq Composite fell 2% in the week — risk-off sentiment overtook the earlier sell logic.
This means → Japanese capital did not suddenly turn bullish on foreign bonds; the tech selloff broke the "sell bonds, buy equities" thesis and pushed money passively back into duration.
Long-end buying, short-end selling — what does the split reveal?
In the same week, Japanese investors net-sold ¥20.93 billion in foreign short-term bills — a stark contrast to the long-end net buying.
In plain terms = money returned only to the "savings" end of the curve; the "short-term parking" end kept shrinking. This is not a broad risk-on move — it is a duration-preference shift driven by hedging.
The Fed held rates unchanged that week, leaving short-end yields unattractive, while price declines at the long end opened a buying window.
Foreign investors bought Japanese bonds too — what does the two-way flow signal?
Foreign investors net-purchased ¥2.36 trillion in Japanese bonds that week — the largest single-week inflow since March 21, 2026 — split between ¥1.48 trillion in long-term bonds and ¥874.7 billion in short-term bills.
This reflects a global risk-off impulse that runs both ways: Japanese money buys foreign bonds while foreign money buys Japanese bonds — both sides moving toward "safe."
Equities saw two-way net buying as well: Japanese investors bought ¥1.08 trillion in foreign stocks (a third straight week), and foreign investors bought ¥1.13 trillion in Japanese stocks (a second straight week) — no sign of a capital flight from equities yet.
Can the inflow last?
The Nasdaq fell another 5.52% on Thursday, and the Nikkei is down roughly 6.14% so far this week — risk-off pressure is still building.
But zooming out, Japanese investors remain net sellers of foreign fixed-income instruments year-to-date by ¥4.38 billion, the largest year-to-date net outflow since the same period in 2022.
In plain terms = one week of net buying barely dents a half-year outflow gap. Whether capital continues to return hinges on two variables: the trajectory of tech stocks and the Fed's next policy move.
市场有风险，内容仅供研究参考，不构成投资建议。