Foreign investors extended their buying streak in Japanese long-term government bonds to a third consecutive week through September 5, lured by higher domestic yields and the possibility of further policy tightening by the Bank of Japan. According to data from Japan's Ministry of Finance, international players made net purchases of 449.6 billion yen ($2.93 billion) in long-term bonds, while simultaneously offloading 275.2 billion yen in short-term instruments.

During the previous week, the 10-year Japanese government bond yield had climbed to 3.015%, marking its highest level since September 1996. This has intensified speculation that domestic investors may begin shifting capital back into the home market. Hawkish remarks from Bank of Japan board member Takata Hiroshi, along with U.S. support for Japan taking "decisive" monetary policy measures to counter inflation and yen weakness, have fueled expectations of an imminent rate hike.

The yen surged to a nearly seven-month high of 152.87 against the U.S. dollar on Tuesday, following a 2.43% appreciation in the prior week. In equities, foreign investors recorded net purchases of 690 million yen in Japanese stocks, marking the largest weekly inflow since July 25. Japanese investors, after two weeks of selling, turned net buyers of 111.9 billion yen in foreign long-term bonds and also acquired approximately 103.8 billion yen in short-term notes.