Japanese investors snap up US Treasuries in August, sell French bonds

LONDON, Oct 8 (Reuters) - Japanese investors snapped up U.S. Treasuries in August and continued to sell French government debt against a backdrop of political uncertainty, data from Japan's ministry of finance showed on Tuesday.

The August Treasuries purchases were a record amount, Commerzbank analysts said.

The data showed net buying of U.S. government bonds of around 5.6 trillion yen ($37.3 billion), up from roughly 1 trillion yen net buying in July.

That buying followed a fall of over 20 basis points in 10-year U.S. government bond yields in July as traders ramped up bets for rate cuts from the U.S. Federal Reserve.

Japanese investors also sold another net 117.6 billion yen ($796 million) in longer-term French government bonds in August, the data showed, though that was much less than over 1.3 trillion yen they sold in July, the most since 2020.

Sentiment towards French bonds has taken a hit since June when French President Emmanuel Macron called a snap election, sparking political uncertainty and concern about the government's ability to get a high deficit under control.

Just over 50% of French government bonds are held by overseas investors, a much higher proportion than in other big economies, and Japanese investors are thought to be one of the leading holders as a group. ($1 = 147.6700 yen) (Reporting by Yoruk Bahceli and Dhara Ranasinghe; editing by Emelia Sithole-Matarise)