"Buying Japan" is being unwound.

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The core driving force of the global market has officially switched from “liquidity concerns” to “macro anxieties.” Under this shift, Japanese assets have become the first to bear pressure.

According to Chasewind Trading Desk, Nomura Securities' latest macro strategy weekly report points out that due to Japan's heavy dependence on oil imports and its extreme sensitivity to global economic cycles, it failed to act as a safe haven asset amid this round of rising geopolitical risks. The previously popular “buy Japan” trade logic has been shaken, and overseas investors are accelerating unwinding of related long positions.

Nomura warns to be alert this week to the continued unwinding of Japanese asset positions. The market may show weak equities, resilient bonds, a strong dollar, and a pressured yen. Investors should closely watch the evolution of the US-Iran conflict and global credit risks.

Market Main Line Shift: From Liquidity Concerns to Macroeconomic Anxiety

Since late January, global risk aversion sentiments have continued to ferment. The market's focus of concern is shifting and expanding: from early concerns over AI overinvestment, expectations of quantitative tightening under potential Fed chair changes, and AI’s impact on employment, gradually spreading to private credit risk and Middle East geopolitical tensions.

The first three factors were once the main causes of market anxiety about the exit of excess liquidity, but US economic data remained robust and macro sentiment had not fallen into extreme pessimism. However, private credit issues surfaced last week, combined with escalating geopolitical conflicts, which became the last straw for sentiment – global macro sentiment worsened sharply.

The direct result of this shift is: US semiconductor and small/mid cap stocks were sold off, capital accelerated outflows from risk assets, and flocked to US and European long-term bonds for safety.

“Buy Japan” Exit: Safe Haven Halo Fades

During the AI industry revolution, Japan once became the ideal “safe harbor” for escaping US capital due to surging semiconductor demand and AI productivity dividends.

However, when market anxiety shifted from industrial disruption to global credit risk and geopolitical conflict, Japan's risk exposure was fully revealed—its structural weakness of relying heavily on oil imports and its extreme sensitivity to global economic cycles caused its safe haven aura to fade instantly.

This shift in perception is driving overseas investors to accelerate unwinding of their “buy Japan” positions established since the House of Representatives election. Although BOJ Governor Kazuo Ueda sent hawkish signals last week to curb yen depreciation, most US investors believe that unless the Japanese government explicitly states its intent to combat yen weakness and accepts a neutral Central Bank path, even if the BOJ raises rates, terminal and neutral rate expectations cannot be substantially raised.

Market Review Last Week: US & EU Long Bonds Favored, Japanese Stocks Bucked Trend and Rose

Last week’s global market was dominated by three factors: credit concerns triggered by the UK, escalating US-Iran military tensions pushing up oil prices, US court ruling Trump administration tariffs unconstitutional weighing on the dollar.

Risk aversion was strong in the bond market, and real yields among G3 countries fell across the board. The US 10-year yield dropped 14bp leading the decline, Europe dropped 9bp, Japan was unchanged. US and European yield curves showed bullish flattening, while Japan saw twisted steepening.

On rate expectations, Fed rate cut probability for April rose from 19% to 25%, June rate cut probability rose to 64%; BOJ April rate hike probability slightly fell to 69%. 2-year forward OIS terminal rate expectations: US fell to 3.03%, Japan unchanged at 1.59%.

In the equities market, divergence intensified. The Nikkei Index rose over 3% leading gains, European indices up nearly 1%, US stocks down about 1%. Tech stocks were under significant pressure, SOX Index and MAG7 both fell around 2%.

In the FX market, the dollar weakened against major currencies except the yen, while the yen was comprehensively pressured, with USD/JPY holding in the 156.0-156.5 range.

Risk Disclaimer and Exemption ClauseMarkets are risky, investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ unique investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investing accordingly is at your own risk. ```