Japan's Bond Rout Prompts Shift in Global Capital Flows as Yields Hit Three-Decade High

Benchmark Japanese bond yields have broken through a three-decade-old barrier, with the 10-year JGB yield hitting 3% for the first time since 1996. This surge in yields is beginning to draw capital back to Japan, reversing a long-standing trend of Japanese funds flowing into global bond markets, including a significant portion of U.S. Treasuries. The shift is contributing to higher term premiums globally as Japanese investors reduce overseas holdings.