According to Reuters, Japanese investors net sold 161.6 billion yen (approximately $1.02 billion) in foreign long-term bonds for the week ending October 17, marking the fifth consecutive week of net selling and the longest continuous selling streak in four years. Over these five weeks, cumulative net sales of foreign long-term bonds amounted to approximately 3.43 trillion yen, bringing the year-to-date net sales total to 5.18 trillion yen, the highest for the same period since 2022.

The core driver behind this shift in capital flows is the cumulative rise of over 80 basis points in the Japanese 10-year government bond yield this year. Data from Japan's Ministry of Finance indicates that this year's foreign bond selling primarily originated from domestic banks. Meanwhile, overseas investors net bought Japanese long-term government bonds for the third consecutive week, purchasing 1.45 trillion yen during the week, demonstrating continued foreign interest in Japanese government bonds.