Last month, the longest-dated Japanese government bonds drew unprecedented foreign interest as investors moved away from U.S. debt in pursuit of other safe havens, prompted by President Donald Trump's tough tariffs, raising fears of a U.S. recession. Foreign investors acquired approximately 2.18 trillion yen ($15.49 billion) in JGBs with maturities exceeding 10 years in March, according to figures released by the Japan Securities Dealers Association on Monday, marking the highest total since the data series began in April 2004, per a Reuter's report.
Trump increased tariffs throughout last month, imposing a 25 per cent duty on vehicles and components, ahead of his April 2 declaration of extensive tariffs that caused global markets to tumble significantly. Simultaneously, domestic insurers offloaded a historic 645.8 billion yen of super-long JGBs during the month while realigning portfolios after Japan’s fiscal year, noted Shoki Omori, chief desk strategist at Mizuho Securities. Decreasing expectations for imminent interest rate increases by the Bank of Japan, attributed to the unpredictable global trade landscape, also facilitated foreign investors in acquiring JGBs, Omori stated.
ALSO READ: Russia's Economy Ministry Cuts 2025 Brent Price Forecast By Nearly 17%, Interfax Reports
On Monday, the yield of the 30-year JGB was 2.76 per cent, following a month of volatility influenced by tariff news, dropping to its lowest since October at 2.195 per cent on April 7 and subsequently soaring to a two-decade high of 2.845 per cent a week later. Throughout March, the 30-year yield increased by approximately 17 basis points to 2.52 per cent, reaching a 19-year high of 2.63 per cent in the middle of the month before beginning to decline as market volatility intensified.
($1 = 140.72 yen)
FIRST Business Portal addressing the potential of business capability of North East Region.
