Quite a few countries including the U.S., Japan, China and Korea have bought each other's bonds (i.e., debts). The central bankers have played a role in this.
From Yonhap:
South Korea's bonds market suffered an exodus of overseas investors in October from three months earlier, data showed Thursday, apparently as they sought other investment tools amid uncertainties.
The outstanding won-denominated bonds held by foreign investors came to 95.7 trillion won (US$90.3 billion) at end-October 2013, plunging 6.9 percent from the 102.9 trillion won tallied at end-July, market data showed.
It marked the third consecutive on-month drop since a 1.7 percent decline tallied in August, when the outstanding volume came to 100.7 trillion won.
The volume of foreign holdings of won-denominated bonds had been gradually growing this year until reaching the annual high of 102.9 trillion won at end-July from 90.1 trillion won tallied at end-January.
Market watchers said the decline came amid the rising uncertainties from home and abroad, including the anticipated tapering of economic stimulus moves by the United States' Federal Reserve.
A monetary easing move by an advanced country usually causes investors to set their sights on riskier emerging markets, while a reduction in the move sparks them to relocate their investments.
Market watchers added foreigners are also anticipated to continue selling local bonds amid the concerns that the South Korean won is expected to slow its appreciation trend against the U.S. dollar.
The won has gained ground in recent trading sessions, supported by the continued current account surplus and an influx of foreign capital. The local currency closed at 1,060.90 won against the greenback Wednesday, surging 8.1 percent from the yearly low of 1,154.50 won tallied on June 26.
"It is likely the recent rise in the won was boosted by an inflow of foreigners to the stock markets, rather than improved economic fundamentals," said Lee Jae-seung, a researcher at KB Investment & Securities Co.
Lee added stock-driven gains in the local currency will only last for the short term, and eventually lead to the depreciation of the won against the U.S. dollar.
Overseas investors' holdings of outstanding won-denominated bonds came to 94.9 trillion won Tuesday, maintaining their selling rally in November, the data added.
http://english.yonhapnews.co.kr/business/2013/11/07/17/0503000000AEN20131107000900320F.html
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