TOKYO, Feb 8 (Reuters) - Japanese investors dumped U.S. and French bonds in December, government data showed on Wednesday, as the post-U.S. election global bond sell-off prompted market participants to unwind aggressive holdings of these two countries’ debt.
Japanese investors sold 2.262 trillion yen ($20.1 billion) of U.S. bonds in December, data from Japan’s Ministry of Finance showed. This is their biggest net selling since May 2013, when U.S. bonds crashed on suggestions from then Federal Reserve Chairman Ben Bernanke that the central bank could taper its bond buying programme.
U.S. bond prices have plunged since U.S. President Donald Trump’s election victory in November, forcing Japanese investors to do an about-face after massive buying of dollar debt products that ranged from U.S. Treasuries to corporate debt.
Still, despite the big sell-off in December and smaller net selling in November, last year saw their U.S. bonds buying hit a record high of 15.4 trillion yen ($137 billion) as they hunted yield in U.S. bonds after the Bank of Japan’s aggressive monetary policy diminished returns on domestic bonds.
Japanese investors also sold 232 billion yen (1.94 billion euros) in French bonds in December, logging their biggest net selling since June 2015.
Early last year, Japanese investors gobbled up French bonds as alternatives to German bunds, whose yields have fallen into negative territory due to the European Central Bank’s stimulus.
For the whole of 2016, they bought 3.839 trillion yen (32 billion euros) of French bonds, their biggest net buying since 2012. ($1 = 112.27 yen) (1 euro = 119.88 yen) (Reporting by Hideyuki Sano; Editing by Sam Holmes)