Foreign Investors May Find Japanese Bonds Attractive, Says Analyst

Kazuhiko Sasaki, Head of Research at Phillip Securities Japan, stated on May 18 that foreign investors might find it easier to purchase Japanese government bonds at current yield levels. According to Jin10, Sasaki noted that he would not be surprised if domestic investors sell foreign bonds in favor of Japanese government bonds. He explained that from an exchange rate perspective, foreign capital inflows into Japanese bonds could lead to yen appreciation, potentially exerting upward pressure on the Japanese stock market. The rise in long-term Japanese government bond yields suggests that policy interest rates might increase, which could be a negative factor for the stock market. A rapid rise in interest rates could have a significant negative impact on the stock market. This cautious sentiment is intensifying amid concerns about inflation driven by rising oil prices.