Investors also bought safe-haven debt amid worries about a possible banking crisis after a failure of U.S. Silicon Valley Bank and Swiss lender Credit Suisse's liquidity issues. The BOJ maintained ultra-low interest rates and held off from making changes to its controversial bond yield control policy at its monetary policy meeting on March 10, defying some expectations of a policy tweak.
JGB yields began falling sharply after the BOJ's decision, and extended the declines as Silicon Valley Bank's meltdown and Credit Suisse's woes drove a flight to safe-haven debt. Japan's benchmark 10-year JGB yield , which was hovering at 0.5%, the top end of the BOJ's policy band, before the BOJ's policy meeting, fell to as low as 0.240% on March 14.
The BOJ meeting was the last one chaired by current Governor Haruhiko Kuroda before a change in the leadership. Kuroda's second, five-year term ends on April 8.
With inflation exceeding the BOJ's target, incoming governor Kazuo Ueda faces the challenge of phasing out the bank's controversial bond yield control policy. "The record amount of JGB buying underscores investors' bet on the policy change," said Kazuhiko Sano, a strategist at Tokai Tokyo Securities. "They needed to rush to buy back JGBs to cover their short positions." Meanwhile, foreigners withdrew a net 2.38 trillion yen out of Japanese equities, marking their biggest weekly net selling since at least 2018, data from Japanese exchanges shows. Japanese investors on the other hand purchased a net 3.34 billion yen worth of long-term overseas bonds, the most since March 2020. They also accumulated 118.2 billion yen worth of foreign equities.
($1 = 130.3000 yen) <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Foreign flows into Japanese debt securities Foreign flows into Japanese stocks Japanese investments in overseas assets yearly Japanese investments in stocks abroad ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Junko Fujita in Tokyo and Gaurav Dogra in Bengaluru; Editing by Rashmi Aich and Nivedita Bhattacharjee)
