Japanese investors sold the most foreign bonds on record as they sought a haven from Europe's financial crisis in the home market, leading the yen to a more than two-month high.
Local investors sold ¥2.62 trillion more foreign bonds and notes than they bought last month, the biggest monthly net sale according to data going back to 2005, the Finance Ministry said Thursday. Yields on Japan's benchmark 10-year securities fell to 0.845 percent this week, the least since October 2010 and 2½ basis points from its lowest since 2003. The comparative rates were 1.87 percent in the U.S. and 1.54 percent in Germany, data compiled by Bloomberg show.
The yen has recovered more than half its losses since the central bank's first monetary easing this year, encouraging domestic investors to keep more assets at home as concerns of a Greek exit from the euro roils global markets. Currency gains and Japan's haven status are also attracting interest from overseas money managers, who bought the biggest amount of Japanese notes in 11 months in April, preserving the second-lowest borrowing costs in the world after Switzerland.