🔴HOLY COW:
Japan’s regional banks’ unrealized losses on their domestic bond holdings hit a RECORD -¥3.3 trillion in Fiscal Q2 2025, ending September 30.
This marks a ¥500 billion surge over Q1.
As Japan’s government bond yields rise their value drops, and as a result, paper… pic.twitter.com/aJWWRcUCOo
— Global Markets Investor (@GlobalMktObserv) December 5, 2025
Japanese government bond yields are SKYROCKETING:
Japan’s 30-year government bond yield hit 3.4%, the highest in at least 25 YEARS, rising 100 basis points YTD.
This has been the WORST year for long-dated Japanese Government Bonds since the 1970s.
https://globalmarketsinvestor.beehiiv.com/p/japanese-government-bond-yields-are-skyrocketing
JAPAN’S SILENT COLLAPSE: THE ¥32.8 TRILLION BLACK HOLE NO ONE IS WATCHING
The Bank of Japan just reported the largest unrealized loss in its 132-year history.
¥32.83 trillion. Gone.
For the first time since 2008, the central bank is paying out more than it earns. Interest payments now exceed income. The institution that printed money to save the world is bleeding.
The bond market has broken free.
10-year yields at 1.94%. Highest since 2007. 30-year yields at 3.44%. All-time record. 40-year yields above 3.70%. Highest ever issued.
This is the sixth consecutive year of losses. The worst performance among 44 sovereign bond markets globally. The largest annual decline since 1990.
The damage is spreading.
Japan’s four largest life insurers carry $67 billion in paper losses on domestic bonds. Regional banks hold ¥3.3 trillion in unrealized hits. Industry experts now cite ¥20 trillion in assets as the survival threshold. Most of Japan’s 73 listed regional banks fall short.
The math is unforgiving.
Debt at 230% of GDP. Inflation above target for 43 straight months. An 80% probability of another rate hike in December. The BOJ owns 52% of all government bonds. It cannot sell without crashing the market it created.
For three decades, the yen funded global risk. Trillions in carry trades. Cheap money for everyone.
That era is ending.
Japan built a ¥695 trillion balance sheet to escape deflation. It succeeded. The price was the stability of the system itself.
The largest monetary experiment in human history is unwinding.
There is no roadmap for what comes next.
Read the full deep dive analysis on Substack. Link below!
When a major institutional bank with heavy securities exposure records big losses or shifts into riskier private-credit bets, it shows the repricing of fixed-income is broad and deep. That increases the chance that regional banks’ bond holdings reprice further, that wholesale liquidity tightens, and that market confidence erodes — turning “paper” losses into forced sales or margin/funding shocks.