The retreat into overseas debt ended a multi-week selling streak totaling 3.51 trillion yen, even though year-to-date flows still reflect the heaviest fixed-income outflows since 2022. Plummeting technology valuations pushed the Nasdaq down 2 per cent after major corporate earnings reports, with an added 5.52 per cent single-day drop spurred by artificial intelligence regulatory concerns. Japan's domestic Nikkei index was not immune, tumbling roughly 6.14 per cent over the course of the week. Meanwhile, domestic buyers offloaded 209.3 billion yen of foreign short-term bills while continuing to absorb foreign equities.
Key points
Disappointing results from Amazon.com, Alphabet, and Intel exacerbated broader market vol…: Disappointing results from Amazon.com, Alphabet, and Intel exacerbated broader market volatility and fueled defensive cross-border investments.
Despite the latest weekly surge, Japanese investors remain net sellers of foreign fixed-i…: Despite the latest weekly surge, Japanese investors remain net sellers of foreign fixed-income assets by 4.38 billion yen this year.
Foreign market participants mirrored the accumulation trend by purchasing 1.13 trillion y…: Foreign market participants mirrored the accumulation trend by purchasing 1.13 trillion yen of Japanese equities during the same period.
Sources checked by our analysis pipeline: 1
Nov 6 : Japanese investors bought foreign long-term bonds for the first time in seven weeks in the week ended October 31, opting for safety amid a selloff in technology stocks and after the Federal Reserve held interest rates steady.
These investors shrugged off earlier concerns about rising energy costs and government debt as the AI trade slipped over disappointing earnings from some top companies.
Traders were watching for signs that enough money was returning home to move Japan's domestic and foreign markets.
Japanese investors bought a net 1.31 trillion yen ($8.31 billion) of foreign long-term bonds after withdrawing a combined 3.51 trillion yen over a six-week selling streak, data from Japan's Ministry of Finance showed. They, however, sold a net 209.3 billion yen of foreign short-term bills.
At the same time, foreign investors poured 2.36 trillion yen into Japanese bonds, the largest amount since March 21. They bought 1.48 trillion yen in long-term bonds and 874.7 billion yen in short-term bills.
The US tech-heavy Nasdaq Composite Index fell 2 per cent last week after Amazon.com and Alphabet reported sharp…
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