Merryn Talks Money Markets Weekly: Japan’s Bond Shock and the Global Ripple Effect
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Jan 23, 2026 This week, the focus is on Japan's bond market, which is shaking up global financial stability. Discussions highlight a spike in Japanese yields and its effects on international markets. Host insights reveal a multi-year trend of investors moving away from U.S. markets towards the UK. There's also chatter about the implications of geopolitical tensions on gold and silver prices. The potential benefits of reshoring and the UK's appeal to investors conclude a captivating session that mixes economics with current events.
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Japan's Election Shocked Bond Markets
- Japan's snap-election tax promises pushed long-term bond yields sharply higher and shocked markets.
- Rising Japanese yields can ripple globally by lifting yields elsewhere and altering cross‑border capital flows.
Yield Shift Could Reverse Japanese Outflows
- Higher JGB yields make Japan relatively more attractive and can pull capital back from overseas markets.
- That return of capital could depress asset prices where Japanese money had been invested, notably US equities.
Tech Stocks Are Vulnerable To Yen Reversal
- Much of Japanese overseas investment went into big US tech stocks, so a yen‑carry reversal hits those names hard.
- Watch the Nasdaq and MAG7-style stocks for spillover from Japanese flows reversing.