The article asks whether shifting capital flows from Japan could trigger the next global financial crisis. In the five months to August 2026, major Japanese banks and insurers bought a net 5.4 trillion yen (US$34.2 billion) of Japanese government bonds maturing in two years or more, banks sold 2.5 trillion yen of foreign bonds in September, and Japanese net investment in long-term US government bonds turned negative this year. Japan holds more than US$1 trillion in US Treasuries, and with the 30-year Japanese government bond yield reaching 4.27%, institutions have incentives to reduce overseas investment. The article argues the real danger lies in several shocks combining, including sharp yen moves, disorderly adjustment in Japanese bond markets and doubts over fiscal sustainability in advanced economies, with leveraged yen carry trades able to force abrupt sales. For now there is no evidence of wholesale repatriation, as Japanese pension funds bought a net 11.4 trillion yen of foreign long-term bonds in the first nine months of 2026.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: Could Japan trigger the next global financial crisis ?
Read the original on businesstimes.com.sg ↗
Keywords
Japancapital flowsbondsUSDJPYyen
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Related tickers and likely impact
SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/20/2026 | 769.01 |
| Change that session | +0.33% |
USD/JPY
▼ Likely negativeRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/20/2026 | 158.173 |
| Change that session | -0.23% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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