Bitunix Analyst: Japanese Government Bonds Become a New Source of Global Volatility, Influx of Foreign Capital Intensifies Risk Transmission

BlockBeats News, December 9 — Overseas investors are entering the Japanese government bond market with unprecedented intensity, accounting for as much as 65% of trading, far higher than the 12% seen 15 years ago. As the Bank of Japan reduces bond purchases and the government launches large-scale fiscal plans, foreign capital has become the main force driving yields higher and increasing volatility. Yields on 30- to 40-year Japanese government bonds have hit multi-year highs, and Japan is shifting from an “ultra-stable market” to a “global exporter of volatility.” Although domestic Japanese institutions still hold more than 80% of outstanding government bonds, providing a degree of stability, foreign investors have high turnover rates and low capital stickiness, so their rapid withdrawal could trigger a chain reaction and potentially affect US, UK, and European sovereign debt. With inflation still above the 2% target, if the Bank of Japan raises rates again, it will further increase global interest rate volatility. Bitunix analysts stated: This week, the market’s core focus will be on both Fed rate cut signals and foreign capital momentum in the Japanese bond market. The Fed’s statements on future rates and liquidity, combined with the high-volatility structure of the Japanese bond market, will jointly shape short-term global risk appetite trends.