Bitunix Analyst: Japanese Government Bonds Become New Source of Global Volatility; Foreign Capital Inflows Exacerbate Risk Transmission

According to Mars Finance, on December 9th, overseas investors are entering the Japanese government bond market with unprecedented力度 (intensity/scale), accounting for 65% of transactions, far exceeding the 12% of transactions 15 years ago. With the Bank of Japan reducing bond purchases and the government launching large-scale fiscal plans, foreign capital has become a major force driving up yields and increasing volatility. Yields on 30- to 40-year Japanese government bonds have reached multi-year highs, and Japan is shifting from an "ultra-stable market" to a "global volatility exporter." Although domestic institutions still hold more than 80% of outstanding Japanese government bonds, providing some stability, the high turnover rate and low capital stickiness of foreign capital mean that its rapid withdrawal could trigger a chain reaction of pressure, potentially spreading to US, UK, and European sovereign debt. With inflation still above the 2% target, another interest rate hike by the Bank of Japan would further increase global interest rate volatility. Bitunix analysts stated that this week, the market's core focus will be on both the Fed's interest rate cut signals and the foreign capital momentum in the Japanese bond market. The Fed's statements on future interest rates and liquidity, combined with the high volatility of the Japanese bond market, will jointly shape the short-term trend of global risk appetite.