The yield on newly issued 10-year Japanese Government Bonds has climbed above 3% for the first time in roughly three decades, strengthening signs that Japanese investors are redirecting funds from foreign bonds into domestic debt. Net sales of overseas bonds reached ¥3 trillion, or approximately $18.8 billion, from the start of the year through Aug. 22, the largest such move since the global bond rout of 2022. Japan is the largest foreign holder of U.S. Treasuries and a major buyer of government debt in markets including France and Australia, so a sustained change in its allocations could affect global bond supply and demand and contribute to higher term premiums (extra yield investors demand for holding longer-term bonds). Higher currency-hedged returns on Japanese bonds are encouraging the reassessment. Corporate pension funds are also accelerating their domestic shift, while attention is turning to GPIF (Japan's government pension fund), whose 25% domestic-bond target could imply transfers of approximately ¥16 trillion or ¥32 trillion if raised to 30% or 35%, respectively. GPIF has not signaled a change, although it invested ¥5.7 trillion in Japanese bonds during the April–June quarter. Analysts say Japan is gradually becoming less of a foreign-bond buyer rather than undergoing a massive repatriation, while the Bank of Japan may need to raise rates faster than markets expect.