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Japanese investors dump foreign bonds in return to domestic market

Mounting currency costs prompt shift that could push down Japan long rates

The rise in currency hedging costs means Japanese investors currently stand to lose money from investing in 10-year U.S. Treasurys.   © Reuters

TOKYO -- Japanese investors dumped foreign bonds at a record pace in 2022, ending a yearslong buying spree as increased currency hedging costs eat into returns from overseas assets.

The investors, including insurers and banks, sold a net 21.74 trillion yen ($168 billion) worth of foreign medium- and long-term bonds last year, the Finance Ministry reports.

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