China buys more of Japan debt
Source: Bloomberg News |
October 12, 2011, Wednesday
|
Print Edition
Print Edition
CHINA bought more Japanese debt than it sold for the first time since October 2010 as the larger nation sought refuge from fiscal crises in the United States and Europe.
The country with the fastest growing major economy bought 345.6 billion yen (US$4.5 billion) in money-market instruments and sold 166.7 billion yen in Japanese bonds and notes in August, resulting in a net purchase of 178.9 billion yen, according to a statement from Japan's Ministry of Finance in Tokyo yesterday.
"Adding to the broad trend that overseas central banks are diversifying away from the US dollar in their currency reserves, the yen has become a refuge from the financial turmoil that started in Europe," said Yuji Kameoka, managing director of the investment strategy and research department in Tokyo at Daiwa Securities Capital Markets Co.
The yen firmed to a postwar record of 75.95 on August 19 amid concern the European sovereign-debt crisis may spread to the region's bigger economies, while Japan's 10-year yields sank to as low as 0.97 percent that month.
Standard & Poor's downgraded the US's AAA long-term credit rating for the first time on August 5.
The yen tends to rise during economic and financial turmoil because Japan's current-account surplus makes it less reliant on foreign capital.
The country with the fastest growing major economy bought 345.6 billion yen (US$4.5 billion) in money-market instruments and sold 166.7 billion yen in Japanese bonds and notes in August, resulting in a net purchase of 178.9 billion yen, according to a statement from Japan's Ministry of Finance in Tokyo yesterday.
"Adding to the broad trend that overseas central banks are diversifying away from the US dollar in their currency reserves, the yen has become a refuge from the financial turmoil that started in Europe," said Yuji Kameoka, managing director of the investment strategy and research department in Tokyo at Daiwa Securities Capital Markets Co.
The yen firmed to a postwar record of 75.95 on August 19 amid concern the European sovereign-debt crisis may spread to the region's bigger economies, while Japan's 10-year yields sank to as low as 0.97 percent that month.
Standard & Poor's downgraded the US's AAA long-term credit rating for the first time on August 5.
The yen tends to rise during economic and financial turmoil because Japan's current-account surplus makes it less reliant on foreign capital.
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