China has no yen for Japanese bonds

TOKYO - China sold a net 177.3 billion yen ($2.15 billion) of Japanese bonds in December, capping the biggest yearly decrease since at least 2005, after the yen and benchmark government debt fell in November.

China sold a net 243.5 billion yen in short-term Japanese debt and bought 66.1 billion yen in long-term bonds, Japan's Ministry of Finance said in a statement on Tuesday. That resulted in net sales of 467.7 billion yen in 2010.

"As upward pressure on the yen has taken a pause, it seems China sold short-term notes to take profit," said Tetsuya Inoue, chief researcher for financial markets at Nomura Research Institute in Tokyo, a unit of Japan's largest brokerage. "On the other hand, China probably wants to have some yen-denominated assets in the long term, since Japan is a big trading partner."