Why Japan’s markets matter so much for America

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From surging bond yields to US intervention to support the yen, Japan’s financial markets are undergoing major shifts that have consequences for investors and borrowing costs around the globe.

Bond yields in Japan have soared to their highest levels in three decades, boosted by inflation, the Bank of Japan raising interest rates and investors’ concerns about the government’s spending plans. Meanwhile, the yen continues to fluctuate after a historic joint intervention by Washington and Tokyo.

The moves in Japan’s bonds and currency have reverberations across the global economy. Japan is the largest foreign holder of US Treasuries, making it a key player for how much money flows in or out of US bond markets .

US Treasury Secretary Scott Bessent has embarked on an extraordinary campaign this year to intervene in markets to support the yen. Analysts say Bessent’s actions aim to prevent Japan from selling its dollar assets – like Treasuries – to boost the value of the yen. Further selling in Treasuries could push up US interest rates when there are concerns about affordability and a steady rise in yields.

The US and Japanese financial markets are becoming increasingly intertwined. And their relationship is back in focus this week as world leaders gather in New York City for the UN General Assembly. President Donald Trump and Japanese Prime Minister Sanae Takaichi are expected to meet Tuesday.

Here’s what to know about recent changes in Japan’s markets, and why there are ripple effects across US and global markets.

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Stubborn inflation, higher central bank interest rates and nerves about government spending have driven borrowing costs higher across the globe. Japan has been among the hardest hit in the bond market sell-off.

Yields on 10-year government bonds in the United States, France, Germany and the United Kingdom have climbed to their highest levels in nearly 20 years. In Japan, the 10-year yield recently hit its highest level in 30 years.

The rise in yields is a sign that economies across the world are entering an era of higher interest rates — and exiting the era of ultra-low interest rates that became a defining feature of the global economy after the 2008 financial crisis.

The bond market rout is global. Here’s what’s driving it

The Bank of Japan — or BOJ — started raising interest rates in 2024, a major change after decades of ultra-low rates aimed at combating deflation. The BOJ hiked rates just last week in an effort to cool down inflation, its second increase this year.

Bond yields rise when prices fall. Bond prices have slumped in Japan, sending yields soaring, as investors adjust to persistent inflation and the BOJ raising rates.

Meanwhile, markets are trying to assess Takaichi’s budget plans. Investors are wary of her plans for tax cuts and increased government spending, which would swell borrowing needs when Japan already has an enormous debt load. In turn, they’re demanding more compensation – or higher yields – to hold Japan’s debt.

The rise in Japan’s yields matters for global markets because it can push up yields elsewhere, including the United States. It also shows how concerns about government spending can translate into higher borrowing costs as investors demand more compensation.

Meanwhile, higher yields in Japan can make buying Japan bonds more attractive for investors – who could pull money out of other markets.

Currency markets are also in focus ahead of the expected Trump-Takaichi meeting Tuesday.

The US Treasury in late July intervened in currency markets to boost the yen after the Japanese currency hit its lowest level against the dollar in 40 years. The move was a historic joint intervention with Japan. The yen hasn’t re-touched those lows since then, but it has weakened closer to those lows in recent weeks.

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The Japanese yen is at a 40-year low. Here’s why that matters

Analysts say the intervention was aimed in part at preventing Japan from selling assets, including US Treasuries, to support its own currency. Data released by the Treasury Department showed Japan reduced its holding of Treasuries in May, June and July. If Japan sells Treasuries, it can push prices lower and yields higher.

That’s put more attention on the trajectory of the yen. Bessent has notably taken interest in trying to manage how Japan’s currency markets impact US markets.

“There are a multitude of factors that at a minimum could create quite a bit of volatility in the market and weigh on the US Treasury market,” Adam Turnquist, chief technical strategist at LPL Financial, said. “I think that’s why you’re seeing more and more conversation and commentary from the Treasury about how the Bank of Japan should handle their monetary policy.”

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Traders are also on alert for just how strong the yen becomes. A strengthening yen while the BOJ is raising interest rates could unravel the so-called carry trade, where investors borrow cheap yen to invest in higher-yielding assets. If the yen rapidly strengthens while Japan’s interest rates are already rising, it suddenly becomes more costly to borrow in yen and investors could be forced to sell their other assets – like stocks and US Treasuries – to close their trade.

While the United States wants to avoid the yen weakening so much that Japan has to sell assets to boost its currency, it also doesn’t want the yen to strengthen so fast that it draws investors away from other markets like the US.

It’s a fine line to walk and highlights the sensitivity of US markets to what happens in Japan. Any sharp moves in Japan’s bond and currency markets could ripple through to global markets and affect US investors.

“Stability is key,” Turnquist said.

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从债券收益率飙升到美国干预支撑日元，日本金融市场正在经历重大转变，这将对全球投资者和借贷成本产生影响。

受通胀、日本央行加息以及投资者对政府支出计划的担忧等因素影响，日本债券收益率飙升至三十年来的最高水平。与此同时，在华盛顿和东京历史性的联合干预之后，日元汇率持续波动。

日本债券和货币的走势会对全球经济产生连锁反应。日本是美国国债的最大外国持有者，因此对美国债券市场的资金流动起着至关重要的作用。

美国财政部长斯科特·贝森特今年发起了一场非同寻常的市场干预行动，旨在支撑日元汇率。分析人士称，贝森特的举措意在阻止日本抛售美元资产（例如美国国债）以提振日元价值。如果日本进一步抛售美国国债，在市场担忧债务负担能力和收益率持续上升的情况下，可能会推高美国利率。

美国和日本的金融市场联系日益紧密。本周，随着世界各国领导人齐聚纽约参加联合国大会，两国关系再次成为关注焦点。预计美国总统唐纳德·特朗普和日本首相高市早苗将于周二会晤。

以下是关于日本市场近期变化以及为何会对美国和全球市场产生连锁反应需要了解的内容。

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持续高企的通胀、央行利率走高以及对政府支出的担忧，推高了全球借贷成本。日本是债券市场抛售潮中受冲击最严重的国家之一。

美国、法国、德国和英国的10年期国债收益率已攀升至近20年来的最高水平。在日本，10年期国债收益率近期也达到了30年来的最高水平。

收益率上升表明，世界各国经济正在进入高利率时代，并退出2008年金融危机后成为全球经济显著特征的超低利率时代。

债券市场暴跌是全球性的。以下是其背后的驱动因素。

日本央行（简称“日本央行”）宣布将于2024年开始加息，这是在数十年来为应对通缩而实施超低利率政策后的一项重大转变。就在上周，日本央行刚刚加息以抑制通胀，这是其今年的第二次加息。

债券价格下跌时，债券收益率上升。由于投资者调整策略以应对持续的通货膨胀和日本央行加息，日本债券价格暴跌，导致收益率飙升。

与此同时，市场正试图评估高市惠介的预算方案。投资者对她提出的减税和增加政府开支的计划持谨慎态度，因为这些计划会在日本本已负债累累的情况下进一步增加借贷需求。因此，他们要求日本政府提供更多补偿——或者更高的收益率——来持有日本国债。

日本国债收益率上升对全球市场影响重大，因为它可能推高包括美国在内的其他地区国债收益率。这也表明，投资者对政府支出的担忧会如何转化为更高的借贷成本，因为他们会要求更高的回报。

与此同时，日本债券收益率的上升可能会使投资者购买日本债券更具吸引力——他们可能会从其他市场撤出资金。

在预计特朗普与高市亮司周二会晤之前，外汇市场也备受关注。

7月下旬，日元兑美元汇率跌至40年来的最低点后，美国财政部出手干预外汇市场以提振日元。此举是美日两国历史上的一次联合干预。此后日元汇率虽未再触及低点，但近几周来已走弱，接近这些低点。

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日元汇率跌至40年来的最低点。这为什么重要？

分析人士称，此次干预的部分目的是为了阻止日本抛售包括美国国债在内的资产以支撑本币汇率。美国财政部公布的数据显示，日本在5月、6月和7月均减少了美国国债的持有量。如果日本抛售美国国债，可能会压低价格并推高收益率。

这使得日元走势更加引人关注。贝森特尤其关注如何应对日本货币市场对美国市场的影响。

LPL Financial首席技术策略师亚当·特恩奎斯特表示：“至少有很多因素可能导致市场出现相当大的波动，并对美国国债市场构成压力。我认为这就是为什么财政部越来越多地就日本央行应如何处理其货币政策发表讨论和评论的原因。”

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交易员们也密切关注日元的强势程度。如果日元在日本央行加息的同时走强，可能会破坏所谓的套利交易——即投资者借入低成本日元投资于高收益资产。如果日元在日本利率已经上升的情况下迅速走强，借入日元的成本将突然上升，投资者可能被迫出售其他资产（例如股票和美国国债）来平仓。

美国一方面希望避免日元贬值到日本不得不抛售资产来提振本币，另一方面也不希望日元升值过快，从而将投资者从美国等其他市场吸引走。

这其中的平衡很难把握，也凸显了美国市场对日本局势的敏感性。日本债券和货币市场的任何剧烈波动都可能波及全球市场，并影响美国投资者。

“稳定是关键，”特恩奎斯特说。