Japanese investors have been buying most of France's government debt recently in a record surge spurred by expectations that Europe faces the kind of deflation and growth that Japan suffered for decades.
Since the European Central Bank (ECB) signaled in May it would take radical steps to ease monetary conditions, banks and other big investors in Japan have piled into French bonds, convinced from their own experience that the debt of a country where the central bank is battling deflation represents a winning bet, market participants say.
"In a way, they are expecting Japanisation - deflation and a long period of zero interest rates," said Hiroki Shimazu, senior market economist at SMBC Nikko Securities.
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Japanese investors bought a net 1.9 trillion yen (14 billion euros) of French bonds in May, equal to more than 60 percent of the government's new issuance that month, Japanese Finance Ministry data shows.
Data is not available for June, but market participants say Japanese buying of French bonds has picked up from May amid a broader increase in buying of euro-zone debt. One suggested Japanese investors may have bought the equivalent of three-fourths of the French new issuance.
French bonds represents a Goldilocks trade for Japanese investors keen for euro-zone exposure: they yield more than German bonds, while lower credit ratings on Italy's bonds - the region's third-most-liquid market - deter active Japanese buying.
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On a gross basis, Japanese investors bought 6.60 trillion yen ($65.2 billion) of French government debt in May, dwarfing last year's 1 trillion yen average and by far the most since the ministry began compiling such data in 2005.
Japan deja-vu
While the euro zone's financial crisis has seen spikes in market interest rates as bond prices plunged, Japanese investors have strong memories of a completely different dynamic.
As Japan suffered years of falling prices and tepid growth, the government's bond market proved one of the world's great long-term bull markets.
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Having slashed interest rates to zero during this period, the Bank of Japan invented the now globally recognized idea of "quantitative easing" - mass purchases of bonds and other debt to inject cash into the economy.
"If you want to make money investing, you have to take the largest position you can take on the most important event of the year - that's how you win," said the Tokyo director of fixed income at a European brokerage. Japanese investors "think the ECB's easing is the biggest event of the year."
The ECB under President Mario Draghi has cut rates, pledged to keep them low "for an extended period" and said it will continue market operations that allot banks their full funding requests at a very cheap rate until December 2016.
Japanese investors have taken that as a signal rates won't rise for more than two years. That means free money by playing for "roll-down" gains on the yield curve: a five-year bond bought now at a 0.47 percent yield and held for two years should rise in price if market rates remain the same, given that three-year debt now yields 0.08-0.09 percent.
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Helped by heavy Japanese buying, the French 10-year bond yield fell to a record low 1.5 percent last week.
But that is still nearly triple the yield that Japanese investors can get at home, where the BOJ's massive purchases - the central bank gobbles up the bulk of domestic JGBs - has crushed the 10-year yield to a 15-month low of 0.54 percent .
The ECB says there is little risk that the euro zone will slip into deflation, but it is déjà vu for Japanese investors, where the BOJ's unprecedented easing is only now generating a modest rebound in prices.
The euro zone inflation rate has slid for three years to 0.5 percent, with Italy at 0.2 percent in June.
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Bank lending in the euro zone is falling as companies shed debt.
Wage growth is slowing, with some countries in southern Europe seeing wages falling.
Japanese investors keenly recall how, during long periods of stagnation, consumers stuffed their money into bank deposits and borrowing slumped, leaving banks with little choice but to plough their cash into Japanese government bonds.
Rising domestic savings boosted Japan's current-account surplus, supporting the yen and inflaming deflationary pressure - another parallel with the euro zone now. The euro zone's current-account surplus hit a record high in January, helping to support the euro despite the ECB's attempt to talk it down.