Cross-border inflows into Japanese bonds surge on safe-haven demand

April 17 (Reuters) - Japanese bonds attracted hefty cross-border inflows for a second straight week, driven by safe-haven demand amid investor concerns over the impact of U.S. tariffs, which could also delay the Bank of Japan’s anticipated interest rate hikes.

Foreign investors net bought long-term Japanese bonds worth 2.3 trillion yen ($16.14 billion) in the week through April 12 after about 2.8 trillion yen worth of net purchases in the prior week, data from Japan's Ministry of Finance showed.

Overseas investors also pumped 2.08 trillion yen into Japanese short-term bills.

U.S. President Donald Trump temporarily lowered the steep tariffs he had imposed on dozens of countries earlier this month. However, a 10% blanket duty on nearly all U.S. imports remains in effect - which analysts believe will continue to dampen business investment and household spending.

The 10-year Japanese government bond yield JP10YTN=JBTC declined to a three-month low of 1.105% last week. Although it rose following a temporary pause in U.S. tariffs, the current yield of 1.28% remains below the 1.465% level seen prior to their announcement.

Meanwhile, Japanese stocks attracted 1.04 trillion yen worth of foreign capital last week after a robust 1.88 trillion in inflow the prior week.

The Nikkei .N225 hit nearly a 1-1/2 year low of 30,792.74 last week, but recovered about 9.07% in the following days to close the week with a marginal 0.58% fall.

Meanwhile, Japanese investors sharply reduced net purchases of foreign stocks last week, acquiring just 258.1 billion yen worth of foreign stocks, compared with a 1.79 trillion yen in net acquisition in the prior week.

They, meanwhile, sold long-term foreign bonds for a sixth straight week, to the tune of 512 billion yen on a net basis.

($1 = 142.5200 yen)