Gearoid Reidy: the world isn’t ready for a Japan with interest (opens the source in a new tab)
- After decades of near-zero rates pushed Japanese savers to lend abroad, higher yields at home are drawing pensions, banks, insurers and households back into Japanese government bonds.
- Japanese investors sold a net ¥4.45tn ($28bn) of US long-term bonds from January to June, their first half-year of net selling since 2022, and pulled back from France and Australia.
- They still bought German, Italian and UK bonds; buying less is enough to lift others’ borrowing costs, and France may be the first casualty.
- ¥4.45tn
- US bonds sold, Jan–Jun
- ¥5.7tn
- state pension fund buying, Q2 (est.)
- ¥1tn+
- retail bond bids a month
Why it matters If Japan’s huge savings pool stays home, governments from Paris to Washington may have to pay more to borrow.
Other side Japanese money isn’t leaving: retail investors still pour yen into foreign stock funds, and Tokyo’s reliance on US security makes a Treasury dump unlikely.