THE WORLD IS LOSING A MAJOR BOND BUYER.
For decades, ultra-low yields pushed Japanese money into foreign markets looking for better returns.
Now that trade has started to reverse.
Japanese investors have already sold around ¥3 trillion of overseas debt, while households bought a record ¥5.14 trillion of Japanese government bonds in just six months.
And the reason is simple.
Japanese bond yields are now paying 2.5%-3% compared to 0% a few years ago.
And with Japanese households sitting on around $7.2 trillion in cash and deposits, they are looking to park their money.
The problem here is that if higher JGB yields keep pulling Japanese money back home, foreign markets will find it difficult to get new buyers, which will push the yields higher and crush the global market.$CELR
For decades, ultra-low yields pushed Japanese money into foreign markets looking for better returns.
Now that trade has started to reverse.
Japanese investors have already sold around ¥3 trillion of overseas debt, while households bought a record ¥5.14 trillion of Japanese government bonds in just six months.
And the reason is simple.
Japanese bond yields are now paying 2.5%-3% compared to 0% a few years ago.
And with Japanese households sitting on around $7.2 trillion in cash and deposits, they are looking to park their money.
The problem here is that if higher JGB yields keep pulling Japanese money back home, foreign markets will find it difficult to get new buyers, which will push the yields higher and crush the global market.$CELR
