SINGAPORE, March 18 Reuters Even as the Bank of Japan prepares for a pivotal change in monetary policy, analysts say much more will need to be done to materially shift the roughly 3 trillion of yen Japanese investors have parked in global bond markets and yen trades.

Japanese investors have invested trillions of yen overseas in their quest to earn anything better than the nearzero returns at home under the BOJ39;s decadeslong effort to end deflation.

The BOJ might change that policy as soon as this week. Rising wages and other business activity suggest stagnation is over, meaning little need for the BOJ to continue to keep shortterm rates negative.

Anticipation of better growth has drawn foreign money into Japanese stocks and driven yen bond yields higher.

It has also put the spotlight on the 2.4 trillion of foreign debt Japan39;s life insurance companies, pension funds, banks and trust firms collectively hold, and how much of those investment flows will return home.

But these holdings earn yen investors upwards of 5, so investors will barely react if the BOJ raises its rates by 10 or 20 basis points, analysts say.

I honestly don39;t think it will have a big impact on flows, says Alex Etra, a senior strategist at analytics firm Exante Data.

Japan39;s overall foreign portfolio investments were 628.45 trillion yen 4.2 trillion at the end of December, Ministry of Finance data shows more than half in interest ratesensitive debt assets, and most of it long term.

The…