Japanese capital has begun returning home, but uncertainty over the peak in domestic bond yields and the Bank of Japan's next moves is delaying a larger repatriation from overseas assets. The BOJ has likely done enough for now to discourage renewed speculative bets against the yen after last week's rate hike, inflation pledges and a reported foreign-exchange market rate check. However, two dovish dissenting votes at the meeting and another bond selloff this week have left major investors reluctant to commit heavily to Japanese bonds while yields continue rising. The yen traded near 159 per dollar on Friday, having surrendered most of its early-September gains, and remains about 1% lower for the year after reaching a near four-decade low just below 164 in July. Speculative yen positioning shifted from a deep net short to a net long of $9.7 billion in the first two weeks of September, the largest net long since July 2025. Analysts say the currency still faces pressure because major central banks have begun raising rates in response to inflation linked to the Middle East war, limiting the likelihood that interest-rate differentials with Japan will narrow soon. Ten-year JGB yields have risen two percentage points in less than two years to above 3%, a 30-year high, making domestic debt more attractive than hedged overseas bonds. Japanese investors bought 4.8 trillion yen of sovereign debt last month, while HSBC estimates banks sold about $70 billion of foreign bonds this year. A shift by the $1.8 trillion Government Pension Investment Fund toward domestic markets could encourage other investors to follow, but State Street Global Advisors' Aaron Hurd said repatriation may not accelerate until 2027 and investors gain confidence that Japanese yields have peaked.