Japanese investors dump foreign assets for 3rd month

Japanese investors continued to sell foreign stocks and bonds for the third consecutive month in December due to concerns about increasing US bond yields and volatile yen movements.

Investors sold 310.7 billion yen ($1.97 billion) in overseas equities and 1.22 trillion yen in bonds, the highest amount since October 2024, according to Japan’s Ministry of Finance data.

Japanese trust accounts sold a net 1.52 trillion yen of foreign stocks for the fourth straight month. Investment trust management companies and life insurers bought 909.9 billion yen and 137.5 billion yen of shares, respectively.

In 2024, Japanese investors sold a net total of 3.48 trillion yen in foreign equities, with the majority of sales occurring in the last quarter. They also bought 4.16 trillion yen worth of overseas bonds during the year.

As the year-end approached, investors lowered their expectations for Federal Reserve interest rate cuts due to potential inflation from tariff, migration, and tax policies under President-elect Donald Trump.

Minutes from the US Federal Reserve’s meeting on December 17-18 last week revealed that officials are growing more worried about ongoing inflationary pressures and the potential impacts of policies implemented by the Trump administration.

According to the Bank of Japan’s data, Japanese investors sold a net 1.87 trillion yen of US equities and divested 471 billion yen of European stocks and 220 billion yen of British stocks in the year up to November.

Attribution: Reuters

Subediting: Y.Yasser

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