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Foreign investors bought a record amount of Japanese shares and bonds in April, since the chaotic sequelae of the “Liberation Day” tariffs of Donald Trump made Tokyo a global shelter for the “drear” trade.
The figures published this week by the Ministry of Finance showed that last month, such as extreme volatility grabbed by markets and the US dollar hesitated, foreign investors were net buyers of Y8.2TN ($ 57 billion) of Japanese values.
That marked the largest monthly race for Japanese assets since the comparable records began in 2005 and was more than three times greater than the average of 20 years for April.
The unprecedented shopping spree of foreign investors included net purchases of shares of $ 25.5 billion, the largest amount since April 2023 and $ 31.5 billion of long -term bonds, the largest since July 2022.
The merchants said that the total had probably been promoted by the purchases of Japanese government bonds (JGBS) by the reserve managers of the global central banks.
Yujiro Goto, FX chief strategist in Nomura, said that long -term Japanese debt purchases “significantly exceeded” seasonal patterns and stood out for occurring in conjunction with a race career.
Investors abroad, he said, may have changed US funds to Japan as part of the “defolarization” trend and saw Japan as a logical option due to the size and relative stability of their markets.
Mansoor Mohi-Udin, chief economist of the Bank of Singapore, said that the huge wave of “Buy Japan” of April had been carried out in a context of shock of investors in the policy changes of the United States, Trump’s commercial war and criticism of Trump’s criticism to the president of the United States Federal Reserve, Jay Powell.
“There is probably something really in the idea that Japan was seeing the effects of disdiring in April,” Mohi-Udin said. “It may be that we are seeing some movement by foreign central banks in JGBs. When they diversify, they are looking for liquid markets, and for a reserve manager, Japan stands out in that regard.”
With Trump this week agreeing to stop additional tariffs on China for 90 days, the markets have stabilized and it is not clear if the stampede in the Japanese assets will continue.
In its most recent monthly survey of institutional investors, published on May 9, Bank of America pointed out a “almost unanimous” vision among fund administrators that the general impact of changes in the economic policy of the Trump administration would be staplation for the United States.
The same survey, conducted in the period after the announcement of “reciprocal” rates of Trump, found that a “short dollar” had become the most popular trade among fund managers.
Bofa analysts wrote that while Trump’s policies induced uncertainty and led many to question the “safe refuge” state of the dollar, their position “remains intact in absolute terms and in relation to all viable alternative currencies.”
