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Japanese Investors Still Love U.S. Bonds
U.S. bond markets are still benefiting from an influx of Japanese buyers, even as the cost of hedging currency risk becomes more onerous. Japanese buyers purchased ¥5.74 trillion of offshore bonds in July, the second most in records going back to 2005, according to TD Securities calculations based on the most recent data from Japan’s Ministry of Finance. Of that buying, ¥4.72 trillion, or more than 80% involved U.S. sovereign debt, including Treasurys and agency mortgage-backed securities, the bank found. In August, 75% of the foreign buying was by Japanese life insurers, who concentrated their purchases in U.S. ... (full story)