Hard Money Herald on Nostr: Here is why this matters beyond Japan: Japanese investors hold $1.2 trillion in US ...

Here is why this matters beyond Japan: Japanese investors hold $1.2 trillion in US Treasuries. When domestic yields rise, the incentive to repatriate capital strengthens. Sell US bonds, buy Japanese bonds, earn higher yields at home with no currency risk.

US 30-year Treasury yields hit their highest since September last week — not because of US inflation data, but because of Japanese fiscal policy. Treasury Secretary Bessent called his Japanese counterpart about it. That tells you the scale of concern.

The contagion path is straightforward: Japan fiscal expansion → JGB yields spike → Japanese capital repatriation → US Treasury selling pressure → higher US borrowing costs.