Long-term Japanese bonds lure China

SINGAPORE / TOKYO - China bought the most Japanese long-term bonds than it has in more than six years and sold stocks as the smaller nation's tsunami and record earthquake in March spurred expectations that interest rates would remain low.

China purchased a net 234.5 billion yen ($2.9 billion) in long-term bonds in March, the largest amount since January 2005, according to data released on Thursday by Japan's Ministry of Finance. China sold a net 100 million yen in Japanese stocks and a net 415.7 billion yen of short-term debt, the figures showed.

"It's possible China expects a low-rate policy after Japan's quake and is buying longer-maturity debt for capital gains," said Makoto Noji, a senior bond and currency strategist in Tokyo at SMBC Nikko Securities Inc, one of the 24 primary dealers obliged to bid at government debt sales.