Japan’s 3% bond yield challenges US Treasuries

• Japan’s 10-year bond yield has briefly topped 3%, its highest level since 1996.
• Japan holds about $1.1 trillion in US Treasuries, putting demand for US debt under pressure.
• A hypothetical 5% shift could move about $55 billion into Japanese assets.

Japan’s 10-year government bond yield has briefly topped 3%, giving local investors stronger returns at home.

The 30-year Japanese yield has also reached a record 4.18%, while yen-hedged US Treasuries offer about 2%.

“Japan is becoming a key focus in global bond markets,” BlackRock said, adding that surging Japanese yields could weigh on US Treasury demand.

Japan holds about $1.1 trillion in US Treasury securities, after decades of low rates pushed investors towards overseas assets.

BlackRock modelled a 5% shift in those holdings, which would move about $55 billion towards Japanese assets.

The calculation is only a scenario, not a forecast, and investors still weigh currency costs, liquidity and regulations.

Higher bond yields could also pressure Bitcoin (CRYPTO:BTC) by offering investors stronger returns from traditional assets and reducing money available for riskier markets.

At the time of reporting, Bitcoin price was $78,484.02.