Japanese Bought Most Long-Term Treasuries on Record in MOF Data

Japanese investors bought a record amount of long-term U.S. Treasuries last year, the Ministry of Finance reported, as record-low yields at home drove the hunt for bonds abroad.  

Net purchases for 2015 totaled 13.85 trillion yen ($118.2 billion), figures from the ministry in Tokyo showed Monday. It was the highest based on the data, which go back to 2005. Ten-year yields on Japanese government bonds, or JGBs, dropped to 0.195 percent in January 2015, a record at the time, and continued their decline to 0.02 last week.

“My customers are buying U.S. Treasuries and bunds because JGB yields are very, very low,” said Hideaki Kuriki, a bond investor in Tokyo at Sumitomo Mitsui Trust Asset Management, which oversees $56.9 billion. They’re hedging 70 percent to 100 percent of the currency risk, he said.

Japanese yields are tumbling again in 2016 after the central bank in January adopted a negative-interest-rate strategy as part of its battle to spur inflation. Investors seeking higher yields outside the nation can earn 1.86 percent from 10-year Treasuries and 0.3 percent on same-maturity German bunds.

Japan’s figures track purchases of long-term U.S. debt and are measured in yen. Data from the U.S. Treasury Department, which include short-term debt and are reported in dollars, show Japanese holdings fell almost 7 percent in 2015 through November, the most recent data available.

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