(Bloomberg) -- Repo rates in Tokyo slumped to a record Thursday as fiscal year-end activity led to a shortage of Japanese government bonds for collateral.

The one-day repurchase rate for transactions starting the next business day fell to minus 1.2%, the lowest since at least 2007, according a gauge from the Japan Securities Dealers Association.

There was a shortage of short-term notes that are used as collateral and some players who typically raise funds by lending out government bonds were on the side lines due to Friday’s year-end, according to Kenji Sato, manager of management planning division at Central Tanshi Co. 

In the bond market, demand for short-term notes has been strong this month, while foreign investors have been increasing purchases as well, he said. Bank of Japan purchases don’t seem to have directly affected the market, he added.

Old-School Voice Brokers Make Comeback in $9 Trillion JGB Market

Foreign investors bought 4.1 trillion yen ($31 billion) of Japanese bonds, the most on record, in the week to March 17 before turning to sellers the following week, according to data from the Ministry of Finance. 

Bond Vigilantes Turn Tail in Japan Triggering Record Debt Buying

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