China Sold Japanese Debt in July for Ninth Month, Japan’s Government Says

China sold more Japanese debt than it bought for a ninth month, according to a statement from Japan’s Ministry of Finance released in Tokyo today.

China sold a net 348.7 billion yen ($4.5 billion) in money- market instruments and bought 12.6 billion yen in Japanese bonds and notes in July, resulting in a total sale of 336.1 billion yen, the statement showed. The U.K. bought a net 6.33 trillion yen in Japanese fixed-income securities.

“Though China sold short-term debt, there is the possibility that their money flowed to Japan via Britain,” said Toru Suehiro, a market analyst in Tokyo at Mizuho Securities Co., one of the 25 primary dealers obliged to bid at the government’s debt sales. “Britain is a global financial hub.”

The yen gained 5 percent against the dollar in July, the biggest monthly advance since December 2008.

Concerns the U.S. economy was struggling to recover and Europe’s debt crisis would worsen boosted demand for Japan’s debt as a refuge, pushing benchmark 10-year yields to 0.97 percent on Aug. 19, the lowest since November.

To contact the reporters on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net; Shigeki Nozawa in Tokyo at snozawa1@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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