An illustration of the flag of Japan but the red circle is also a bomb with a sparking fuse.

Illustration: Álvaro Bernis

Jan 29th 2026|New York|3 min read

JAPAN IS A global investment colossus. Its financial institutions hold $6trn-worth in foreign securities, a figure which has doubled in the past 20 years as rock-bottom interest rates and a weak yen depressed domestic returns. Half of this is tied up in American assets and another fifth in the Cayman Islands, chiefly as a conduit for more American investments. What would happen if Japanese investors suddenly pulled their money back home?

Signage for Mizuho Bank Ltd., a unit of Mizuho Financial Group Inc. (MHFG), at one of the bank's branches in Tokyo, Japan.

The fate of Japan’s $6trn foreign portfolio rattles global markets