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Japan’s investors sell the eurozone government debt in the finest run for more than a decade, with analysts that one of the cornerstone bondholders can lead to sharp market sales.

The Japanese Investors’ net sales increased to € 41bn in six months until November – the latest figure to be released – according to the data from Japan’s Ministry of Finance and the Bank of Japan, with Goldman Sachs.

The Future of Higher Bonds of the House and Political Challenges in Europe – including the collapse of the ruling coalition in Germany to the election next month, and french-acting under an emergency budget – facilitating Sales, the analysts say. French bonds are the best for sale during € 26bn.

Sale adds additional pressure to the owed European Governments facing a leap of borrowing costs, and highlighted how Increased Japanese interest After years of negative territory the financial markets around the world.

Japanese investors who returned home a “game exchange for Japan and world markets,” said Alain Bokobza, leader of the global asset of societies.

Although Japan investors have become nets selling eurozone bonds most of the past few years, the flow has improved in recent months.

Japan’s Influations Become “a strong source of (European) governmental government needs for a long time,” says Tomasz Wieladek, an asset manager’s economist T Rowe Price . But today’s markets “shoot at a bond guardian” where “fast and violent sales” can occur often.

Gareth Hill, a Bond Fund Manager of Royal London Asset Management, says the scenario “long-term concerns with the government bonds in Europe, due to high property properties ( ) to Japanese investors “and can place pressure on the market.

In addition, increasing hedging costs against yen value changes enable debt abroad more unattractive. Despite getting down from a peak of 2022, if hedging costs are considered, the 10-year of the government’s bond of bonds for Japan investors is over 1 percent, which is almost identical to 10-year yield in Japanese, according to Noriatsu Tanji, Chief Bond Strategist in Mizuho Securities in Tokyo. He referred to regional banks of Japan one of the main European debt dealers.

“Japan investors need to ask themselves difficult how much size they have to hold onto foreign bonds,” says Andres Sanchez Balcazar, head of global bonds on the Pictet, the largest manager of the Pictet, assets in europe.

Norinchukin – is one of Japan’s largest institutional investors – last year says this is planning to offload more than ¥ 10tn foreign bonds this year’s financial. In November, the loss was recorded at nearly $ 3bn in the second quarter after the losses of many properties of foreign government.

Japan’s withdrawal of investors put upward pressure on bond yields have already increased since the European Central Bank has begun to reduce its balance program in the event of a large emergency purchase program during Coronavirus pandemic, as the analysts.

France – with one of Europe’s deepest bond markets and historically becomes Japanese investors because of the addition of German’s debt – seeing the big ones in Japanese -Os months.

Between June and November, as a political crisis resulted in the fall of Michel Barnier’s government, the overall flow of Japanese funds arrived at € 26bn, in comparison to the same time Time last year.

“There is no question that for France the buyer’s base changes,” Seamus Mac Gorain, president of the Global Rates of JPMorgan Asset Management.

Over the past 20 years, Japanese investors have become a cornerstone investor in some bond markets because ultra-low yields make foreign investors more attractive, including major investors like pension funds that must buy safe sovereign debt.

General maintenance of foreign bonds of Japan’s institutional investors arrived at $ 3 trillion in their upper 2020, according to the IMF.

However, while Japan investors have already begun for home returns, their net purchase of global debt securities declined to $ 15bn overall in the last five years – a distant distinct to nearly $ 500bn of such purchases they performed in the last five years, according to the calculations of Alex Etra, a macro strategist of the exante.

“While Japanese bonds are not very attractive for domestic investors before, it is more attractive today,” said Jpmorgan’s Gorain. “That’s a change in structure.”