“A cheap yen has been one of the last bastions of the global carry trade,” said Naomi Fink, chief global strategist at Amova Asset Management, one of Japan’s biggest asset managers. If the central bank steps up rate hikes, this can translate into lower prices for riskier assets globally, according to Fink. But “Japan has got itself into a really vulnerable position,” said Marlborough Investment’s Athey. “If authorities simply ignore these moves, then the market could get really dysfunctional, and they will then have to respond to a much worse situation.”

 

Japan Bond Crash Unleashes a $7 Trillion Risk for Global Markets

As the country hurtles towards the snap election called by Prime Minister Takaichi, more unpredictable and violent price swings are expected

By Mia Glass, Ruth Carson, and John Cheng

January 25, 2026 at 5:00 PM EST