Yen

On Thursday morning, the Japanese Ministry of Finance released its weekly International Transactions in Securities data covering March 1 to 7, the first full week of the Iran war. Within hours, a widely shared post on X announced: the BOJ had sold ¥400 billion in foreign bonds. The carry trade was still unwinding into the oil shock. This reading is wrong on every count. The data in question comes from Section 1 of the MOF release: Portfolio Investment Assets, which tracks transactions by Japanese residents, not the Bank of Japan. The BOJ’s foreign reserve operations are excluded from this dataset entirely. The ¥400 billion figure was a net purchase of foreign long-term debt securities by Japanese institutional investors. Positive in Section 1 means net acquisition, not net disposition. The sign convention changed in January 2014: plus now denotes buying, not selling. ...

The Bank of Japan’s policy board meets on March 18–19 with the overnight rate at 0.75%, the highest in thirty years. The market expects a hold. The decision itself is not the story. The language is. Two forces are pulling in opposite directions, and the words the BOJ chooses to describe the balance between them will determine whether April remains a live meeting or whether the next hike slips to June or beyond. ...

Ten days ago, Brent crude was $66. On Monday it touched $119.50 before settling around $93. The Nikkei 225 fell 5.2% on Monday. USD/JPY hit 159.14, one tick from what traders regard as the Ministry of Finance intervention threshold. The UST 10-year yield briefly breached 4.21% before pulling back to 4.13%. And yet the financial system did not crack. This article examines what Scott Bessent spent to keep it that way, what it reveals about the yen’s role in a crisis, and why his binding constraint — the 10-year yield — is tighter now than it was before the first missile was launched. ...

In February 2026, Japanese life insurers sold ¥3.42 trillion in foreign bonds — the sharpest monthly exit since October 2024. The entire Q4 2025 figure, itself the largest quarterly reduction since 2008, was compressed into a single month. The Middle East conflict accelerated this. But the conflict did not cause it. That distinction matters more than most commentary has acknowledged. Why the money is moving Japanese life insurers manage liabilities that extend decades into the future. For most of the past twenty years, meeting those liabilities required reaching offshore for yield that Japan’s financial repression could not provide. US Treasuries, European sovereign bonds, dollar-denominated corporate credit — all of it was a workaround for a domestic market where the Bank of Japan kept yields artificially low. ...

On 30 January 2026, President Trump nominated Kevin Warsh to succeed Jerome Powell as chairman of the Federal Reserve. The Senate confirmation process is underway, and Warsh is expected to take the chair when Powell’s term expires in May. Most Western coverage has focused on what this means for US rates and the dollar. Less discussed is what it might mean for Japanese equities, and why investors looking to diversify beyond an increasingly concentrated US market should be paying attention. ...

The Japanese yen has weakened dramatically against the dollar and the euro over the past four years, falling from roughly 110 to the dollar in early 2021 to above 155 by late 2025. For Japanese investors, this has been painful. For American and European investors, it may be something quite different: an entry point. Currency movements are notoriously difficult to predict, and anyone who claims certainty about where the yen is headed should be treated with scepticism. But the structural forces that drove the yen to multi-decade lows are beginning to shift, and investors who understand those forces can make a more informed judgement about whether yen-denominated assets belong in their portfolio. ...