(Bloomberg) — Japanese investors bought the largest amount of German sovereign debt since 2018 in September, while continuing to shift away from French bonds amid concern over the nation’s finances.

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They purchased ¥859.6 billion ($5.6 billion) of German bonds on a net basis in September, balance-of-payments data from Japan showed on Monday. The nation’s funds sold French sovereign notes for a fifth month, the longest selling streak since 2022.

Yield premiums that investors demand to hold French bonds over German debt stood close to the widest since 2012 as the minority government in France struggled to contain budget deficits. A 2025 budget proposal has been under scrutiny in a hung parliament since early October.

“This may be a little too optimistic, but French-German yields spreads could start to shrink from December as the budget proposal is expected to pass the parliament,” in France, said Keisuke Fukuda, a senior economist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo.

Sovereign bonds refer to debt issued by governments, government agencies and local governments.

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