TOKYO/LONDON – With benchmark Japanese bond yields breaking through a three-decade-old barrier, higher returns are starting to tease capital home, reversing what was once a dependable flow of funds into global bond markets.
The 3% threshold is significant not just for funding costs in Tokyo, but for turning around an investment flow that has made Japan the biggest owner of U.S. Treasuries and one of the most reliable buyers of sovereign debt worldwide.
As the global bond rout deepened on Wednesday, traders said part of the move rested on bets Japanese investors would retreat from overseas holdings.
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