SHORT ANSWER
The core idea
Foreign investors buy government bonds for reserve management, yield, liquidity, diversification, regulatory needs and currency exposure.
THE MECHANISM
What is happening underneath
The attractiveness of a bond depends on both its local yield and the cost or expected return of the currency.
MARKET INTERPRETATION
How investors should read it
Hedging costs can make a high nominal yield unattractive to a foreign buyer.
BONDSTATS TAKEAWAY
The same market move can carry different information depending on which maturity, issuer and risk premium is changing. Read the question together with the underlying concepts rather than treating one price move as a universal signal.
RELATED CONCEPTS
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