Foreign investors sold ¥1.25 trillion in Japanese government bonds last week while simultaneously buying ¥621 billion in Japanese equities, according to Japan’s Ministry of Finance data. This sale represents approximately $8.5 billion and marks one of the most significant shifts in foreign capital flows in recent months. This massive portfolio rotation signals a confidence shift toward the Japanese equity market over the country’s sovereign debt. For the week of August 2-8, the flows were more nuanced, with net dispositions of ¥368.5 billion in equities, while short-term debt securities recorded net inflows.
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