I noticed that in February, Japanese investors’ outflows from foreign bonds were quite rapid. In a single month, 3.07 trillion yen worth was sold, the largest figure in 16 months. In other words, capital is flowing back toward Japanese bonds because domestic interest rates now look more attractive.

Interestingly, these same investors are steadily buying foreign stocks. In February, they purchased 642.1 billion yen worth, marking the second consecutive month of buying. The main reason behind this is the growing crowd in NISA accounts, where people are buying shares for tax-free returns. The Japanese government’s plan appears to be successful in redirecting household cash toward the market.

So overall, it’s an interesting shift—returning to Japanese bonds while also seeing more activity in the stock market. The record of 6.5 trillion yen in sales in October 2024 has now been broken in February. This interest-rate game is significantly changing investors’ portfolios.