Japanese capital withdraws from US bonds? Sumitomo Mitsui adjusts its holdings strategy, potentially affecting the US financing landscape

【Crypto Push】A noteworthy trend is emerging—the funding chain of US Treasury bonds is quietly loosening. A well-known crypto investor recently pointed out a potential hidden risk in the US debt market: what will happen if Japanese investors, due to rising domestic bond yields, decide to shift their focus to the local market and stop channeling funds into the US debt market?

This is not unfounded. Sumitomo Mitsui Financial Group, Japan’s second-largest financial institution, recently sent a signal— they are adjusting their strategy. Data shows that once the wave of soaring Japanese government bond yields subsides, this bank is prepared to significantly increase its investment in domestic sovereign debt (JGBs). Even more aggressively, they plan to expand their holdings of Japanese government bonds to twice their current level.

What does this change indicate? The flow of international capital is being reshuffled. When investment institutions prioritize protecting their domestic market returns, the appeal of USD-denominated bonds will inevitably decline. For those paying attention to macroeconomic cycles, this is a signal worth noting.