China went from scooping up the most Japanese debt in a year to selling the most, exiting the world's lowest yields as forecasters expect the yen to retreat further from the 15-year high seen in November.
The country sold a net ¥81.3 billion of Japanese bonds in November, the Finance Ministry said Wednesday. China had been set for the biggest yearly increase in data going back to 2005 before unwinding with net sales in three of the four months through November.
"With China's currency likely to appreciate against the yen, there is little incentive for China to buy Japanese debt," said Masaru Hamasaki, chief strategist at Toyota Asset Management Co. in Tokyo, which manages about $17 billion. "Because of low yields and currency risk, I think China won't buy Japanese debt that much this year."