There are great expectations that Japanese companies flooded with liquidity will pour some of it into foreign bond markets, but latest capital flow data published on Thursday tell a different story.
Japanese institutions were net sellers of foreign bonds for a sixth straight week, selling 862.6 billion yen ($8.7 billion) in overseas debt for the week ended April 20, according to weekly data from the Ministry of Finance, more than double the net 331.9 billion in the previous week.
The country's latest $1.4 trillion monetary stimulus program has raised hopes among investors that Japanese liquidity will now be used to buy foreign assets like bonds, but this has yet to happen in a big way.
(Read More: Japan Investors Keep Repatriating Foreign Assets)
And a large driver behind this, according to market watchers, is Japanese firms taking advantage of the recent fall in U.S. Treasury yields - which move in the opposite direction to prices - to sell U.S. bonds and repatriate funds back home.
The steep deprecation in the yen also makes it the right time to repatriate overseas investments, said experts.