They sold a net ¥355.9 billion (US$2.40 billion) worth of long-term foreign bonds during the week, their largest weekly net sales since Feb 1, data from Japan’s finance ministry showed.

Germany’s 10-year bond yield reached a 16-1/2-month peak of 2.938% yesterday as Friedrich Merz, likely to be the next chancellor, sought support for significantly increased state borrowing to stimulate the economy and enhance military spending.

Japanese investors have allocated approximately ¥2.96 trillion to long-term foreign debt securities this year, a decrease from net purchases of about ¥5.8 trillion during the same period last year.

Meanwhile, Japanese market participants took advantage of a stronger yen to boost their position in foreign shares, which are available at reduced prices following a recent global selloff in equities.

They pumped a robust ¥1.26 trillion into foreign shares, the biggest amount for a week since Aug 3.

Meanwhile, foreign investors bought a net ¥686.4 billion worth of long-term foreign bonds, extending net purchases into a fourth consecutive week.

They also snapped up a net ¥1.1 trillion worth of short-term instruments, the highest in seven weeks.

Simultaneously, Japanese stocks faced a net ¥220.5 billion worth of foreign outflows, with cross-border investors withdrawing funds for a sixth straight week.