Bank of Japan owns 52% of all domestic government bonds

The Bank of Japan holds 52.0% of Japanese government bonds, totaling 4.1 trillion USD. This ownership reflects reliance on the central bank to support the bond market, leading to liquidity problems amid rising costs and falling demand.

Japan’s yield curve is steepening rapidly, causing heightened market stress. While foreign investment in bonds is increasing, domestic demand, particularly from life insurers, remains deficient, complicating the long-term outlook for bond stability.