(FT) -- Japan has expressed concern about China's recent sharp increase in purchases of Japanese government bonds in the latest of a series of sour notes in a traditionally tense bilateral relationship that both sides had worked hard to steady.
China's purchases of JGBs is an especially sensitive issue as it plays into anxieties in Japan about the strengthening yen and its impact on the economy.
Tokyo and Beijing also clashed this week after Japanese authorities arrested the captain of a Chinese fishing boat in the disputed waters of the East China Sea.
"There is something unnatural about the fact that China can buy Japanese government bonds while Japan cannot [buy Chinese bonds]," Yoshihiko Noda, the Japanese finance minister said.
"There is room for both governments to hold discussions with an eye towards improving that situation".
In the first seven months of this year, Chinese net purchases of JGBs were about Y2,300bn ($27.4bn), according to the Japanese finance ministry.
While Mr. Noda did not link Chinese purchases of Japanese bonds to the rise of the yen, he said Japan wanted an explanation for China's purchase of a "huge amount of short-term" JGBs in May.
CNN
