Japanese investors sold ¥503.6 billion of foreign debt in the week through October 3 as Japanese and US bond yields climbed.
Japanese investors have sold about 5.08 trillion yen of foreign bonds on a net basis so far this year, the highest amount since 2022. The decline has lasted three weeks.
The moves point to a changing relative-return calculation. Japanese government bonds are offering more, while high US yields can make overseas debt less attractive after currency and financing costs. The possible effect on Bitcoin remains an analytical hypothesis, not an observed transaction flow.
Among Japanese investors who have been hunting higher yields overseas, it makes sense that they will start to bring their funds home to the JGB market
Japan's Ministry of Finance said the October 6 auction of 10-year government bonds drew stronger demand compared with the amount offered, while the average yield reached 3.101%. That yield exceeded the 2.995% recorded at the September 1 sale by 10.6 basis points.
The ratio of competitive bids to bonds offered increased from about 3.29 times to 3.76 times. Meanwhile, the yield tail decreased from 1.6 to 0.2 basis points. Together, these results indicate that demand held up at the higher yield, but the figures do not show the buyers' identities.
Foreign-debt figures cover different periods
During the two weeks from September 13 to September 26, Japan’s Ministry of Finance recorded ¥2.5894 trillion in total net long-term debt sales. This came from ¥1.9049 trillion sold in the first week and ¥684.5 billion in the second. These figures are separate from the following week ending October 3, which saw an additional ¥503.6 billion in net sales.
The data come from designated major reporting institutions resident in Japan and group foreign securities according to where their issuers reside. They do not show whether sales involved US Treasury securities, currency conversion, reinvestment into Japanese government bonds or Bitcoin transactions.
Local Japanese investors poured a net 1.32 trillion yen into foreign stocks. Meanwhile, overseas capital heavily favored Japan's equity market, with foreign investors making a net purchase of 2.19 trillion yen in Japanese stocks. On the fixed-income side, foreign buyers net-bought a much more modest 585.7 billion yen of Japanese long-term bonds.
As French borrowing costs reached their highest level since the 2000s, Sumitomo Mitsui DS Asset Management said it had shifted some holdings from French government bonds into German and Japanese debt.
Bitcoin financing channel remains unproven
A Bank for International Settlements working paper looks at cross-border Bitcoin and Ether flows. It finds that global funding conditions and speculative motives are important influences. The authors said their sample, covering 2017 to mid-2024, shows that funding conditions matter for crypto flows.
In their August 2024 analysis, BIS researchers described how deleveraging and margin increases amplified that month's market turbulence. Those findings provide a possible mechanism linking tighter funding conditions to crypto flows, but they do not prove that this episode is moving Bitcoin.
The next useful evidence is whether foreign-debt selling continues alongside independently observed funding stress, CryptoSlate said. That pattern would be consistent with the proposed Bitcoin financing channel; renewed buying and calm funding would weaken the interpretation.
