The nation's public pension funds bought domestic stocks and sold bonds last quarter as equities posted their worst start to a year in two decades and yields plumbed new depths below zero.
The funds purchased ¥965.4 billion worth of local shares in the three months ended March 31, and sold ¥1.4 trillion of the country's government bonds, an 11th straight quarter of net selling, according to Bank of Japan data published Friday. Pension managers also offloaded ¥86.7 billion in overseas assets, the first time they have been net sellers since the first quarter of 2014.
The BOJ results echo separate data from the nation's bourse that showed trust banks, which manage pension money, were net buyers of Japanese equities almost every week in the first quarter while foreign investors sold. The Topix index tumbled 13 percent in the period and is down about 18 percent this year for the worst start since 1995, while the yen rose 6.8 percent against the dollar last quarter, its biggest such increase since September 2009.
Bond yields on 10-year Japanese government debt tumbled below zero in February after the BOJ said at the end of January that it will adopt negative interest rates on some bank reserves. Yields were minus 0.19 percent on Friday, while the Topix climbed 1.7 percent as of 10:13 a.m.
Pension funds held a total ¥40.9 trillion in Japanese shares at the end of March, and ¥52.5 trillion in local debt, BOJ data showed.