* Japan investors mark longest net foreign bond-buying streak since Nov * Foreigners turn net sellers of Japan shares after 5 weeks of buying TOKYO, Aug 1 (Reuters) - Japan's longest foreign bond-buying binge since November continued last week, according to data released on Thursday, but Japanese investors' appetite for overseas debt faded. Japanese buyers took in a net 233.2 billion yen ($2.37 billion) of foreign bonds in the week through July 27, the fourth straight week of net purchases, capital flows data compiled by the Ministry of Finance showed. But net buying slumped from 601.4 billion yen in the previous week and 1.109 trillion yen the week before, which was the largest amount since September 2012. Some Japanese investors looked for higher returns abroad as the Bank of Japan's aggressive monetary easing policy has put a lid on domestic bond yields. The benchmark 10-year Japanese government bond yield touched a two-month low of 0.770 percent brushed last week, and has mostly stuck to a narrow 0.80 percent to 0.90 percent range since late May. By contrast, the yield on the benchmark 10-year U.S. Treasury note is trading above 2.5 percent, on perceptions that the U.S. Federal Reserve is likely to begin tapering the $85 billion in mortgage and Treasury securities it buys each month to stimulate the U.S. economy. However, the U.S. central bank offered no signs at its latest meeting that such a tapering was imminent. "The taper story came in May and then continued into June, and then in July didn't have much development," giving Japanese investors less incentive to buy U.S. debt, said Maki Shimizu, senior strategist at Citigroup in Tokyo. "I'm rather surprised that they're still buying because there is a risk that yields [on U.S. Treasuries] can jump from 2.5 percent," she added. The weekly capital flows data also revealed that foreign investors turned net sellers of Japanese stocks last week, breaking a five-week buying trend by unloading a net 61.8 billion yen worth of shares. The Nikkei stock average shed 0.1 percent in July, falling for a third month. The ministry's weekly data is based on surveys of financial institutions and does not break down the flows by destination or specific investment instruments.