Global investors bought a record S $74 billion worth of Japanese stocks and bonds in April

US President Trump's reciprocal tariffs have caused chaos in the global financial market, making Tokyo, Japan a global haven for "de-dollarization" trade. Foreign investors bought record Japanese stocks and bonds in April.

The latest data released by Japan's Ministry of Finance shows that in April, amid extreme market volatility and a weak US dollar, overseas investors net purchased 8.2 trillion yen (S $74 billion) worth of Japanese securities.

This is the largest single-month rush to buy Japanese assets since records began in 2005, more than three times the 20-year average in April.

The unprecedented buying spree by foreign investors included net purchases of $25.5 billion in Japanese stocks, the largest amount since April 2023, and $31.5 billion in long-term bonds, the highest since July 2022.

Market traders pointed out that global investors' record-breaking purchase of yen assets in April might have been driven by global central banks' purchase of Japanese government bonds.

Yuji Goto, chief foreign exchange strategist at Nomura Securities, told the Financial Times that the amount of long-term Japanese bonds bought by investors "significantly exceeded" the seasonal trend, and the phenomenon of both bonds and stocks being snapped up simultaneously was particularly special.

He said that overseas investors might transfer US funds to Japan due to the trend of "de-dollarization" and consider Japan a reasonable choice because of its large and relatively stable market size.

With the United States and China agreeing this week to suspend high reciprocal tariffs for 90 days, the market has stabilized. It remains unclear whether investors will continue to snap up Japanese assets.

In the latest monthly survey of institutional investors released on May 9th, Bank of America pointed out that fund managers almost unanimously believed that the overall impact of changes in the economic policies of the Trump administration would lead to stagflation in the United States.

This survey was conducted during the period after Trump announced reciprocal tariffs, and "shorting the US dollar" became the most popular trading theme among fund managers at that time.

However, analysts at Bank of America believe that although Trump's policies have raised uncertainties and led many to question the "safe haven" status of the US dollar, in an absolute sense, the US dollar "remains unchanged" compared with all feasible alternative currencies.