China'S "Clearance" Purchase Of Japanese Treasury Bonds &Nbsp; &Nbsp; Or Reduction For High Prices This Year.

The yen has risen strongly in the past few months, or the reason why China reduced its holdings of Japanese government bonds ahead of schedule.

As China Japan relations remain sensitive, the latest data released by Japan's Ministry of Finance yesterday showed that

Market analysts believe that the yen will continue to hit a new high in September, which may be the reason why China continues to reduce Japanese government bonds. However, some people insist that it may be other sensitive reasons that led to China's reduction of Japanese government debt for second consecutive months.

What is obvious is that China continued to increase its 438 billion Korean won Korean government bonds in October, and has increased 3 trillion and 716 billion Korean won Korean government bonds in the first 10 months of this year.

As of 19 yesterday, the yen was 91.18 against the US dollar, 0.6% against Japanese yen, 8.19 against Japanese yen and 0.19% by Japanese yen.

Two reduction of Japanese government bonds

According to data from Japan's Ministry of finance, China sold a net yen of 144 billion 900 million yen in September, and sold 624 billion 300 million yen in Japan's short-term treasury bonds. The two assets add up to 769 billion 200 million yen.

This is China's second month reduction in Japanese bonds.

In August, China sold 2 trillion and 20 billion yen Japanese government bonds at a time, the first reduction in China's holdings of Japanese government bonds in 7 consecutive months, and the biggest single month reduction since 2005.

According to yesterday's data, the Morning Post reporter found that China's August and September two months had already cleared all the Japanese government bonds purchased during the year.

According to historical data, China bought a total of 541 billion yen worth of Japanese government bonds in 1-4 this year. In May, China bought a net yen of 735 billion 200 million yen, but in June, this figure dropped slightly to 456 billion 700 million yen, but in July, the net yen purchase amount reached 583 billion yen again.

In the first 7 months of this year, China purchased 23159 billion yen of Japanese government bonds.

According to yesterday's data, China sold about 27892 billion yuan of Japanese government bonds in two months in August and September.

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China

At present, all parties are concerned about why China has successively reduced its holdings of Japanese government bonds.

Obviously, according to the foregoing historical data, China began to substantially increase its holdings of Japanese government bonds at the beginning of this year, and it began to increase significantly in May.

But only two months later, China began to reduce its holdings.

In response, Sera Reiko, a market strategist at Sumitomo trust and banking in Japan, said in an interview with Caixin net that the yen trend might affect China's reduction of Japanese government bonds.

From August to September, the yen went even higher, allowing China to find that the Japanese yen's exchange rate approached the upper limit and decided to reduce Japanese bonds.

Daisuke, an analyst at Mizuho Industrial Bank, also said that in order to avoid the risk posed by the European sovereign debt crisis, China temporarily invested heavily in Japan with large current account surplus from May to July this year.

However, as the yen has hit a new high of 15 against the dollar in August, China began to reduce its holdings of Japanese bonds.

This statement is not without reason.

After all, from the US dollar index and the yen to us dollar exchange rate trend (Note: because China's foreign exchange reserves are denominated in US dollars), China's operation is precise.

In May, it began to reduce US Treasury bonds and rapidly increased its holdings of Japanese government bonds. In June, the US dollar index began to turn downward, and the US dollar index began to rebound recently.

Or because of the cooling of Sino Japanese Relations

However, there are still market participants who do not accept the above view.

What is obvious is that when China increased its holdings of Japanese government bonds in May this year, the relevant Chinese agencies had once expressed that this is the need to adjust foreign exchange reserves.

In August of this year, when the Japanese finance ministry Minezaki Naoki asked China to substantially increase its holdings of Japanese bonds and China, the Chinese Ministry of foreign affairs also strongly responded: China's foreign exchange management has always been in line with the principle of "security, mobility, value preservation and value-added", and implemented a diversified strategy.

In the view of some market participants, China's reduction of Japanese government bonds in August may be related to the cooling of Sino Japanese relations.

At the same time, a joint-stock bank foreign exchange researcher interviewed by the Morning Post reporter yesterday said that, technically, the yen is unlikely to weaken in the short term, and it will certainly achieve a new high.

It is worth mentioning that the researcher said that it is not easy for China to reduce its holdings of Japanese government bonds, because China can also entrust other overseas institutions to buy when it reduces its own holdings.