Japanese Investors Drive US Sovereign Bond Purchases in September, Cash Funds Set for Record Inflows in 2023

Japanese investors bought the most US sovereign bonds in six months in September, leading to fund flows into higher-yielding debt, which has put pressure on the yen. Foreign investors turned net buyers of Japanese stocks, buoyed by the Bank of Japan's ultra-easy monetary policy. Additionally, Japanese investments in foreign bonds and equities slowed in October due to higher U.S. bond yields and a depreciating yen. Cash funds are attracting massive inflows, with global investors pouring money into cash funds, set for record inflows in 2023. US bond funds also saw their biggest weekly inflow in three months. Despite huge deposit inflows, bank loan volumes have plunged, and the Fed's rescue fund usage has surged to a new record high.