Japans financial markets are facing a perfect storm as stocks, bond yields and the yen all move against investors this month, stoking a wave of "Sell Japan" concern.
Data from last week showed the Nikkei 225 Index plunging more than 3 percent, erasing about $127 billion off the value of Tokyo-listed stocks, according to Bloomberg. At the same time, bond yields surged: the benchmark 10-year Japanese government bond yield breached 1.8 percent—its highest level in nearly 17 years—while the 30-year yield climbed to multi-decade highs.
Investors point to growing skepticism over Japans fiscal outlook under new Prime Minister Sanae Takaichi, who assumed office earlier this month. Markets are bracing for additional government spending and prolonged monetary easing, even as public debt remains among the highest in the developed world.
The yen has weakened against major currencies, amplifying import costs and raising concerns about capital outflows as global carry trades shift in search of higher yields. Traders say this dynamic could reshape cross-border flows, benefiting markets with tighter monetary policies.
Looking ahead, eyes are on the Bank of Japans next policy moves and Tokyos fiscal planning for signs of stabilization. For globally minded investors, the recent volatility underscores both the risks and unique opportunities in one of the worlds largest financial markets.
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Japanese markets hit by triple blows as 'Sell Japan' fear intensifies
cgtn.com
