(Reuters) – Japanese investors net sold foreign stocks and bonds for a third straight month in December, wary of rising U.S. bond yields, while some also booked gains amid sharp swings in the yen.
Investors sold a net worth of 310.7 billion yen ($1.97 billion) of foreign stocks after net sales of 1.22 trillion yen a month ago, according to Japan’s finance ministry. They also gave up 1.22 trillion yen worth of bonds, the most since October 2024.
Japanese treasury bills continued their trend, shedding a net 1.52 trillion yen worth of foreign stocks, marking their fourth consecutive month of net sales. In contrast, mutual fund management companies and life insurers acquired shares worth ¥909.9 billion and ¥137.5 billion, respectively.
In 2024, Japanese investors were net sellers of foreign stocks, paying about 3.48 trillion yen, with the bulk of sales – 3.9 trillion yen worth of stocks – in the last quarter. In contrast, they bought 4.16 trillion yen worth of foreign bonds throughout the year.
Towards the end of the year, investors lowered their expectations for a Federal Reserve interest rate cut, influenced by the potential for increased inflation due to tariffs, migration and tax policies of the administration of incoming US President Donald Trump.
Last week, minutes from the Fed’s Dec. 17-18 meeting highlighted officials’ growing concerns about continued price pressures and the potential impact of Trump administration policies.
It hit its highest level in more than two years this week, with the benchmark 10-year yield climbing to 4.805%, the highest since November 2023, amid changing expectations for a Fed rate cut.
Bank of Japan data showed local investors sold a net ¥1.87 trillion worth of U.S. stocks in the year to November. They also sold 471 billion yen worth of European stocks and 220 billion yen worth of British stocks during the same period.
($1 = ¥157.4200)
