July 8 (Reuters) - Japanese investors sold foreign bonds

in June, as U.S. Treasury bond yields dropped on hopes that the

Federal Reserve would cut rates soon amid cooling price

pressures.

Domestic investors offloaded a net 3.93 trillion yen

($24.42 billion) worth of foreign bonds last month, their

largest monthly net selling since June 2022, as per Japan's

Ministry of Finance data.

They sold about 3.35 trillion yen worth of long-term

overseas bonds, registering there largest monthly net disposal

in two years. They also pulled a net 574.8 billion yen from

short-term debt instruments.

Barclays said the large sales in foreign assets last month

was due to pension rebalancing on the back of equity rally and

yen depreciation.

Simultaneously, domestic investors withdrew about 1 trillion

yen out of foreign equities as they extended net selling into a

second successive month.

Japanese banks ditched a noticeable 2.85 trillion yen worth

of long-term foreign bonds, which was their biggest monthly net

selling since June 2022. Trust accounts, meanwhile, remained net

sellers for a third straight month, with about 207.5 billion yen

in net sales.

Conversely, insurance companies bought 182.8 billion yen

worth of long-term securities, in contrast to 133.4 billion yen

worth of net selling, a month ago.

In May, Japanese investors had acquired about 3.2 trillion

yen worth of U.S. bonds. They, however, sold British and

European bonds of 48 billion yen and 31 billion yen,

respectively, Bank of Japan data showed.

($1 = 160.9400 yen)