Japanese Investors Shift Toward Domestic Bonds as Yields Rise

U.S. debt. Yields on 10-year and 30-year Japanese government bonds have reached their highest levels since the 1990s. The Bank of Japan is expected to raise rates for the fifth time since 2024, citing higher oil prices linked to the Iran war.

Minister Sanae Takaichi has increased government spending to support growth and offset higher energy costs, adding to inflationary pressure. March recorded the largest monthly inflow ever into Japanese sovereign bond funds. U.S. corporate bonds or Treasuries. 75 percent to 1 percent. The move would end a long period of ultra-low and negative rates used to combat deflation.

The Treasury Department sold $25 billion of 30-year bonds at a 5 percent yield last week, the first time since 2007 that a 30-year issue carried a 5 percent rate. Earlier in the week, auctions for two-, five- and seven-year notes also drew muted demand.

-Israeli war on Iran began, had recorded the highest demand in the history of 30-year offerings. U.S. debt in recent years while hedge funds have taken a larger share.

U.S. debt are running at $1 trillion a year. Last week the Treasury Department said it expects to borrow more than previously projected this quarter because incoming cash flow has been softer than forecast. Mark Malek, chief investment officer at Siebert Financial, noted that the Federal Reserve has cut its benchmark rate by 175 basis points since mid-2024, yet the 10-year Treasury yield has fallen only about 35 basis points while the 30-year yield reached 5 percent.

“The new money that’s being put to work won’t be put to work overseas. U.S. Treasuries. It will be going into those domestic allocations.”