Part 7/11:
The fragility of the bond market extends beyond America. Japan, once the benchmark for global yields, also recently experienced weak demand at its bond auctions. This marks a significant shift in investor psychology, as the long-held perception that Japanese bonds offered a stable anchor for global yields is waning.
Since 2022, both U.S. and Japanese long-term bonds have failed to deliver the traditional safe-haven benefits. Instead of appreciating during crises, these bonds have underperformed, with many investors experiencing losses. This unprecedented scenario erodes the fundamental trust that has underpinned decades of global financial stability, prompting a reassessment of diversification strategies.