Fitch Sees Higher Japan Yields Keeping Funds at Home

Fitch Ratings reports that rising Japanese bond yields may keep domestic institutional money at home. The agency expects Bank of Japan policy rates to rise faster than market consensus.

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FILE PHOTO: A Japanese flag flutters atop the Bank of Japan headquarters in Tokyo, Japan  December19, 2025. REUTERS/Manami Yamada/File Photo

Rising Japanese bond yields will keep domestic capital at home, boosting the yen and shifting global debt flows, Fitch Ratings said Wednesday morning. The ratings agency expects policy rates to climb faster than market consensus through 2027. Higher local returns reduce the incentive for domestic institutions to chase foreign assets, according to Fitch markets research head Monsur Hussain.

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