Insight into Next Week's TIC Data and Japanese Activity

The US Treasury will report the July TIC data at the end of next week. Japan's July capital account figures may shed some light on what to expect. These figures show that Japanese investors bought JPY3.6 trillion (~$42.8 bln) of US Treasuries.

Admittedly the Japanese data is not directly comparable with the TIC data which is derived from transactions coming through the US financial system. But, the Japanese purchases were exceptionally strong. It was the second highest monthly purchases behind the Oct 01's JPY3.72 trillion, since the This is also more twice the monthly average in the current fiscal year.

Japan's appetite for European bonds is considerably less during this FY. Japan has net sellers of bunds for two of the four months. Over the four months, its average net purchase has been JPY152 bln. Japan stepped up its buying of French bonds in July to JPY401 bln. Even with this, its average monthly purchase during this fiscal is a minor JPY15 bln, having sold JPY357 bln of French bonds at the start of the fiscal year in April.

Japanese investors bought a monthly average JPY117 bln of UK debt obligations in the first third of the fiscal year.