TOKYO - China sold a net 177.3 billion yen ($2.15 billion) of Japanese bonds in December, capping the biggest yearly decrease since at least 2005, after the yen and benchmark government debt fell in November.

China sold a net 243.5 billion yen in short-term Japanese debt and bought 66.1 billion yen in long-term bonds, Japan's Ministry of Finance said in a statement on Tuesday. That resulted in net sales of 467.7 billion yen in 2010.

"As upward pressure on the yen has taken a pause, it seems China sold short-term notes to take profit," said Tetsuya Inoue, chief researcher for financial markets at Nomura Research Institute in Tokyo, a unit of Japan's largest brokerage. "On the other hand, China probably wants to have some yen-denominated assets in the long term, since Japan is a big trading partner."

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The yen dropped 3.9 percent in November against the dollar, the first decline since April. Yields on 10-year Japanese government debt climbed 26.5 basis points, or 0.265 percentage point, in November, the biggest surge since April 2008.

Japan's government bonds had a 1.2 percent loss in November, according to indices from Bank of America Merrill Lynch. Japan's currency has fallen 1.7 percent over the past three months against the Group of 10 developed-nation currencies, Bloomberg Correlation-Weighted Currency Indices show. The dollar is down 0.2 percent, while the euro slid 2.7 percent.

The yen traded at 82.31 per dollar as of 12:35 pm in Tokyo on Tuesday. The yen touched 80.22 per dollar on Nov 1, the highest since April 1995.

The United Kingdom was the largest buyer of Japanese securities in December.

Bloomberg News