Rising BOJ yields are attracting renewed investor demand for yen-denominated bonds after decades of ultra-low rates
Too little corroboration in the last 3 days to call a trend (1 article). Watching for it to gain traction.
Sources note that the Bank of Japan's shift toward monetary policy normalization since 2024 has meaningfully increased the appeal of Japanese government bonds, which had long been shunned by yield-seeking investors. The move higher in BOJ yields is drawing fresh capital into yen-denominated fixed income after an extended period of near-zero or negative rates.
When a major global central bank raises yields from historically suppressed levels, it can trigger repatriation of capital by domestic investors who had previously sought returns abroad, reducing demand for foreign assets including U.S. Treasuries and adding upward pressure to yields across global bond markets.
"Interest in Japanese bonds has increased since the Bank of Japan began normalizing monetary policy in 2024, allowing bond yields to move higher."