[The Bank of Japan's Rate Hike Reduces the Appeal of U.S. Assets for Japanese Investors] Jin10 News, September 18 – The Bank of Japan has raised its benchmark interest rate to 1.25% and signaled further rate hikes. This policy shift could have widespread implications, affecting markets beyond Japan. Japanese investors hold approximately $2.5 trillion in U.S. stocks, bonds, and other financial assets, accounting for about half of Japan's $5 trillion overseas investment portfolio. Rising Japanese interest rates may attract capital back to Japan, potentially slowing or reversing cash flows that have supported U.S. and global markets. "The yen supertanker is turning," said Rory Green, Head of Asia and Emerging Markets Research at London-based GlobalData TS Lombard. Some analysts believe that a moderate rise in Japanese interest rates may still not be enough to entice Japanese investors to repatriate large amounts of capital, as they can continue to invest in U.S. tech stocks or purchase bonds from other countries offering higher yields, which currently remain above Japan's bond yields. "At the moment, I don't expect a large-scale repatriation of funds from U.S. Treasuries to Japan," said Norihiro Yamaguchi, Chief Japan Economist at Oxford Economics in Tokyo. He added that only when the Bank of Japan provides greater clarity on how high it plans to raise its benchmark interest rate might Japanese investors be prompted to further increase their allocation to domestic assets.