Japanese banks just dumped $16 billion in foreign bonds in September—biggest monthly sale since February and their 9th straight month of selling. That's the longest streak since 2022.
First 9 months of 2025 saw the largest foreign bond sales by Japanese banks since 2005. Where's the money going? Back home.
Japanese government bond yields hit 3-decade highs, and banks are piling in. Over 5 months through August, they bought $34 billion in JGBs with 2+ year maturities—biggest 5-month run since early 2023.
This isn't just a Japan story. It's a global shift. When domestic yields finally pay, capital flows reverse. Foreign bonds lose their appeal. Decades of zero rates conditioned everyone to look abroad for yield. Now the math is changing.
Watch currency markets. Watch Treasury demand. Watch who's buying U.S. debt when traditional buyers step back. The era of automatic foreign bid may be ending.
First 9 months of 2025 saw the largest foreign bond sales by Japanese banks since 2005. Where's the money going? Back home.
Japanese government bond yields hit 3-decade highs, and banks are piling in. Over 5 months through August, they bought $34 billion in JGBs with 2+ year maturities—biggest 5-month run since early 2023.
This isn't just a Japan story. It's a global shift. When domestic yields finally pay, capital flows reverse. Foreign bonds lose their appeal. Decades of zero rates conditioned everyone to look abroad for yield. Now the math is changing.
Watch currency markets. Watch Treasury demand. Watch who's buying U.S. debt when traditional buyers step back. The era of automatic foreign bid may be ending.