According to foreign sources, the Japanese domestic debt market has recently shown a consistent upward trend, with the return on 10-year national debt rising to a high of over 30 years, and the rate of 20-year return near a high of decades. In the context of the continued expansion of long-term bond issuance by the Government of Japan and the gradual reduction of debt acquisition by the Central Bank of Japan, the market has begun to reassess the risk of global capital flows to Japan.

10 and 20-year rates of return High

The article mentions that Japan ' s annual sovereign debt return has risen to 2.84 per cent, a high of 30 years. Over the past year, there has been a cumulative increase of 137 basis points, with a significant increase in recent weeks.

Meanwhile, the Government of Japan continues to issue more long-term national debt, pushing the annual rate of return to 30 years. On the other hand, the yen against the United States dollar remains at a low level of nearly 40 years, and changes in the combination of debt and remittance markets are increasing expectations of market volatility.

Bank of Japan debt reduction

For many years, the Central Bank of Japan has been the largest buyer of Japan's domestic debt, reducing financing costs through large-scale debt purchases, enabling the Government to borrow on a sustained basis in a low interest rate environment.

The article notes, however, that the situation is changing. As the Central Bank of Japan gradually reduced its debt purchases and the Government was prepared to increase its long-term debt issuance, supplies that had been absorbed by the Central Bank began to go to the market for more digestion, putting the rate of return under upward pressure.

Japanese yen arbitrage bond

In the view of external sources, the impact of changes in interest rates in Japan on global asset allocation is of greater concern. Over the past years, low-interest yen has been an important source of global financing transactions, with investors borrowing low-cost yen for high-yielding or volatile assets such as United States equities, bonds, real estate and bitcoin.

According to the article, the global yen arbitrage deal is currently about $1.2 trillion. Once the rate of return in Japan itself continues to rise, some of the funds may choose to withdraw from overseas assets and move back to the Japanese market, putting pressure on the global valuation of risk assets.

  • Global yen arbitrage of about $1.2 trillion
  • In June 2026, FDI netted about $19.2 billion in domestic debt.
  • The corresponding amount is about 312 trillion yen.

The article also mentions that in June 2026, foreign investors sold about 312 trillion yen of domestic debt, or $19.2 billion, one of the largest single-month outflows since the beginning of 2023. According to this, if the Japanese debt market continues to fluctuate, both the global stock market and the encryption market may be under greater pressure to withdraw funds.

In the case of the encryption market, the original text links the recent echo to this macro background. At the same time, however, it was mentioned that bitcoin had rebounded after its sale, with the most recent price above $63,000, rising by about 7 per cent in the past week.