[BlackRock: The Impact of Japan's Rate Reset Has Surpassed Borders] BlackRock strategists stated in a research report that as capital competition intensifies, the impact of Japan's rate reset has transcended its borders. The strategists believe there is a feedback loop between bond markets: 'Rising U.S. interest rates may weaken the yen and pressure the Bank of Japan to act more quickly; meanwhile, rising Japanese interest rates may attract more capital back to Japan, reducing demand for U.S. Treasuries and thereby increasing U.S. borrowing costs.' They pointed out that Japan's domestic ultra-low yields over the decades have made the country a major exporter of capital, currently holding approximately $1.1 trillion in U.S. Treasuries. If Japanese investors repatriate 5% of their funds, it would amount to $55 billion, roughly a quarter of the total increase in foreign holdings of U.S. Treasuries last year.