US Investors Dump $57B Into Japan’s Markets on ’Liberation Day’—A Record Splurge

Wall Street’s love affair with Japanese assets hits new heights—just as the yen craters to three-decade lows. Classic hedge fund timing.

Liberation Day saw American buyers snap up ¥8.4 trillion in stocks and bonds, eclipsing all previous records. The buying spree coincides with Japan’s corporate governance reforms finally bearing fruit—or so the sales pitches claim.

Meanwhile, Tokyo’s regulators cheer from the sidelines, quietly counting their forex reserves. Because nothing says ’financial liberation’ like foreign investors doing the heavy lifting.

Global central banks poured cash into Japan

Traders said the bond surge likely came from central bank reserve managers who needed to MOVE money out of US assets fast. A big chunk of the buying landed in Japanese Government Bonds (JGBs)—seen as a liquid and stable option during uncertain times.

Yujiro Goto, chief FX strategist at Nomura, said the size of long-term bond purchases “significantly exceeded” what’s typical for April. More importantly, he pointed out how unusual it was to see investors go hard into both bonds and stocks at the same time. Yujiro explained that the action looked like a de-dollarisation play, with foreign investors moving out of the US and into Japan, where the markets are big and stable enough to handle that much capital.

Mansoor Mohi-uddin, chief economist at the Bank of Singapore, said the flood of money into Japan happened after investors got spooked by Trump’s economic policies, including his trade war and public shots at Federal Reserve chair Jay Powell.

“There is probably some truth to the idea that Japan was seeing the effects of de-dollarization in April,” Mansoor said. He explained that when central banks diversify their reserves, they’re looking for liquid markets, and Japan fits that profile better than most.

This week, TRUMP agreed to pause new tariffs on China for 90 days, which helped calm things down a little. But it’s still unclear whether that slowdown will stop the flow into Japanese markets.

On May 9, Bank of America released new data from its institutional investor survey. Nearly every fund manager surveyed said Trump’s economic policies WOULD lead to stagflation in the US That’s slow growth combined with rising prices. The survey also found that betting against the US dollar had become the most common trade among managers since Trump’s reciprocal tariff move.

Even with the fear, BofA analysts said the dollar’s status wasn’t dead yet. They said the currency’s position “remains intact in absolute terms and relative to all viable alternative currencies.” Investors might be nervous, but the dollar still has no real replacement.

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