Impact Growth Capital Newsletter

Japan's bond market just had its worst day since Trump's "Liberation Day" tariffs.

Impact Growth Capital
January 23, 2026

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A Global Repricing of Risk Is Quietly Pressuring U.S. Rates and Real Asset Assumptions

If you own US real estate or hold Treasuries, here's why this matters to you:

What happened:

Japanese PM Sanae Takaichi called a snap election and promised to suspend the 8% food tax for two years. Cost: $32 billion annually with no clear funding source.

The bond market's response was immediate and brutal:

40-year JGB yield hit 4% first time ANY Japanese sovereign bond crossed that threshold in 30+ years
10-year yield surged to 2.3%, highest since 1999
20 and 30-year bonds saw their biggest single-day moves since April 2025

Why US investors should care:

Japan holds $1.2 trillion in US Treasuries more than any other country.

For decades, near-zero Japanese yields pushed their capital overseas seeking returns. That trade is now under pressure. When JGB yields rise, the incentive to park money in US bonds weakens.

Less demand for Treasuries → Higher US yields → Higher mortgage rates.

The nuance:

This isn't a crisis—yet. Analysts are calling it the "Takaichi trade," similar to market jitters when she took office in October. Japanese 10-year yields at 2.3% still don't compete with US yields near 4.5%.

But the trend matters more than the level. Japan's debt-to-GDP ratio sits at 250% highest in the developed world. Every basis point increase in borrowing costs compounds fast at that scale.

What We’re Watching

The Feb 8 election. If Takaichi wins decisively and doubles down on fiscal expansion, this repricing has room to run.

For those of us in real estate: the "soft landing" narrative assumes stable Treasury markets. Japan just reminded us how quickly that assumption can be tested.

If you’re allocating capital and want to discuss how shifts in global rates affect real asset underwriting, you can request a private conversation with us.