Capital markets · 24 July 2026
Reforms in Japan – risks for the rest of the world
Japan’s shifting policy mix is changing global capital flows, currency assumptions and the outlook for government bonds.
A structural shift
Corporate governance reform, wage growth and a gradual return of inflation are changing how global investors assess Japanese assets. The transition creates opportunities, but it also challenges assumptions built during decades of very low interest rates.
Why global portfolios are affected
Higher domestic yields may encourage Japanese institutions to bring capital home. That can affect demand for overseas government bonds and increase currency volatility across developed markets.
Portfolio implications
Diversification remains essential. Investors should review duration risk, currency exposure and the resilience of income allocations rather than reacting to individual policy announcements.
This material is for information only and does not constitute personal investment advice.