China bought the most Japanese long-term bonds and notes since at least 2005 in March, sparking speculation that the country may be diversifying its foreign exchange reserves into the yen.
The latest figures from Japan’s finance ministry show net inflows from mainland China into Japanese bonds with maturities of over a year reached Y234.5bn ($2.9bn) in March. It marks the sixth straight month of net purchases, though the previous months’ buying was much smaller.
Analysts said it would make sense for China to be buying Japanese debt as part of its foreign exchange reserves, given its reluctance to hold all of its foreign-currency reserves in US dollars, and that it could be looking to shift away from the euro at a time when the fundamentals in some of the eurozone’s debt markets are under strain.
The yen would be an attractive option because it is a highly liquid market outside the US dollar and the euro, analysts added.
“这很可能是更长期多样化战略的一部分，不只是持有美元资产，可能还有欧元，因为他们的资产组合中欧元资产偏多了一些，”法国兴业银行(Société Générale)亚太利率策略主管克里斯蒂安•卡瑞罗(Christian Carrillo)表示。“我很怀疑他们只是在执行购买日本长期债券的计划。”
“It’s probably part of a longer-term diversification away from just dollars and perhaps euros because they have rather too many euros in their portfolios,” said Christian Carrillo, head of Asia-Pacific interest rate strategy at Société Générale. “I very much doubt they’re just going ahead on a programme of buying long-end [Japanese] bonds.”
However, analysts warned that flows data from Japan’s finance ministry only tell a small part of the picture as the data only track where the transactions were carried out, rather than who owns the bonds. In other words, China is highly likely to be making further Japan-related trades through financial centres such as London, New York and Hong Kong.
While the Japanese data showed that China has been actively buying longer-dated Japanese debt, this has been countered by a much larger net sale of money market instruments – short-dated bills of a year or less – at Y415.7bn for March, the fifth straight month of net sales.
“You could say maybe they started to dabble a little in buying [longer-dated] bonds and just to keep the risk of their portfolio neutral, it’s possible they’d just sold a lot more of the short-term bonds,” Mr Carrillo said.
It is impossible to tell precisely which maturities of longer-dated bonds the Chinese are buying. But, despite the rise in trades, the overall amount will have a limited impact on the market, given that the Japanese government’s monthly issuance in March was probably close to Y10,000bn.
There is already steady demand for Japanese government bonds from domestic investors, which hold around 95 per cent of the country’s huge debt pile. However, given the likelihood that the government may have to issue additional bonds in a supplementary budget to pay for part of the reconstruction from the devastating earthquake and tsunami in March, an increased investor base would be helpful.
China caused quite a stir last year when Japan’s balance of payments figures showed a sharp increase in net purchases from China of short-dated bills of a year or less, generating debate over its intentions and currency-market impact.
2011-05-13 13:49 编辑：典典
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