Buying more of Tokyo's debt is high-risk move

China has diversified its huge pool of foreign reserves by cutting US Treasury bond holdings and increasing the proportion of Japanese debt, but I believe purchasing more Japanese debt could be a high-risk maneuver.

According to Japan's Ministry of Finance, China has been increasing its holdings of Japanese government bonds (JGB) in the past six months.

In the first six months of this year, China increased its holdings of JGB by 1.73 trillion yen ($20.2 billion), the highest amount since 2005.