Little more than a year since Japan finally offered yields high enough to draw global bond managers back to its debt market, many are starting to retreat.
T. Rowe Price Group, Schroders and Brandywine Global Investment Management are among those who have recently reduced exposure to long-dated Japanese government bonds (JGBs) or limited themselves to tactical holdings. The most up-to-date data for April shows that overseas investors sold more superlong Japanese debt than they bought for the first time since 2024.
The retreat reflects concern that the Bank of Japan is unlikely to tighten monetary policy quickly enough to contain inflation and stabilize the market ¡ª even after an interest rate hike expected on Tuesday. For many, the attraction of yields that have set multidecade highs this year has been overshadowed by concerns that the BOJ is behind the curve and vulnerable to political pressure.
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