Japan Eyes $7 Trillion Household Savings Pile For Fresh Bond Demand

Justin

Political

Economic

Bond

Summary:

Japan is looking to the country's $7 trillion household savings hoard to support bond demand with plans to launch new products and incentives, building on hot recent retail sales and filling a void left by diminished central bank buying.

Key points:

· Retail JGB sales jump in 2025 to their highest since 2007

· Finance ministry expanding scope of retail bonds

· Investment trusts for 30-year JGBs launched as yields surged

Efforts to attract Japanese households are not new — in 2010, the finance ministry created a mascot Kokusai-sensei, or Professor JGB, to pitch the securities and later even offered gold coins to buyers of special reconstruction bonds.

But where mascots and shiny metals struggled, higher yields have succeeded in drawing in buyers this year. Retail Japanese government bond (JGB) sales jumped 30.5% in 2025 to 5.28 trillion yen ($33.55 billion), the highest since 2007.

Enthused by strong momentum, at a meeting with more than a dozen institutional investors in late November, the finance ministry faced calls to step up efforts to attract retail buyers, minutes of the meeting released by the ministry showed.

Broadening the investor base for JGBs has become critical for market stability as Prime Minister Sanae Takaichi's reflationary policies fuel concerns about the government's plans to borrow and spend.

'FINDING NEW INVESTORS'

Japan's 10-year government bond yield jumped past the 2% ceiling for the first time in 26 years on Friday after the Bank of Japan (BOJ) raised interest rates to a three-decade high and signalled more policy tightening.

Households are seen as a key source of new demand as the BOJ scales back its buying and commercial banks face limits to their bond-buying firepower from capital rules that curb interest rate risk.

With retail JGBs yielding even less than the type sold to banks, the securities have historically been a tough sell.

Domestic households own less than 2% of the 1.06 quadrillion yen in outstanding JGBs, and about half of Japan's 2.20 quadrillion yen in household financial assets sit in cash or low-yield deposits.

Thomson ReutersRetail JGB Issuance

"When it comes to finding new investors, we believe there is room for expansion among individuals," said one participant of the finance ministry's meeting, according to minutes that did not name the speakers.

"As overseas investors cannot be relied upon as stable holders, we should consider product designs that encourage ownership by individual investors, such as increasing offerings like investment trusts for 30-year bonds," another said.

'HIGHER YIELDS'

Daiwa Asset Management and Amova Asset Management in recent months launched investment trusts focused on 30-year JGBs, targeting domestic retail bond investors for the first time.

Amova started thinking about crafting the trust when the 30-year JGB yield hit 3%, said Takuya Kanazawa, a senior vice president at the firm's product development department. The yield exceeded 3% for the first time in May and climbed to a fresh record of 3.445% on Monday.

"The 3% yield is high enough to beat inflation," said Kanazawa.

"When retail investors think about investing in high-yield debt, it tended to be U.S. or Australian bonds, but those always carry the currency risks," he added. "With this fund, they can enjoy higher yields without such risks."

Thomson ReutersJapan yields challenge 2% ceiling that characterized lost decades

NUCB Business School professor Nana Otsuki, who attended the finance ministry's meeting with investors, said that household ownership of JGBs could potentially rise to 5%-6% if the product design is revamped.

"Having people hold government bonds would be a meaningful step forward as it could fuel a sense of responsibility among them over what the Takaichi administration calls responsible proactive fiscal policy," she said.

With regard to the investors' proposals, a senior finance ministry official told Reuters the government was preparing to expand the target market for retail JGB sales from January 2027 to include non-profit corporations and unlisted companies.

The ministry is also gathering opinions for other potential measures, said the official.

The University of Tokyo's Center for Applied Capital Markets Research, where Otsuki serves as a fellow, this month urged the government to overhaul retail JGB products to make them more attractive.

Proposed steps include making retail JGBs eligible under NISA tax-free investment accounts and revising the coupon-setting formula, which currently applies a discount to benchmark yields in exchange for principal protection.

Takahiro Otsuka, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities, said Japan could look to the case of Italy, which has boosted retail bond sales through incentives such as higher coupons as a reward for holding bonds for longer.

"That said, this is essentially the same as offering a tax break, raising the question of how to weigh that trade-off," Otsuka said.

($1 = 157.3600 yen)

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Stocks

AI IPO Frenzy in China

In recent weeks, two major Chinese AI companies MetaX Integrated Circuits and Moore Threads made headlines with their market debuts. MetaX surged nearly 700%, and Moore Threads jumped more than 400% on their first trading days, highlighting a booming appetite among domestic investors for AI-linked stocks, especially those listed on the STAR Market, China’s Nasdaq-style tech board focused on strategic industries.

Despite the hype, most foreign retail investors are locked out. Participating in mainland China IPOs typically requires:

A Chinese bank account

A linked brokerage account with a domestic firm

Proof of residence in China or a valid long-term visa

Pre-existing holdings of mainland-listed shares

These requirements make direct access nearly impossible for most foreigners living abroad. The complexity of opening an onshore brokerage account is further compounded by the lack of cooperation between most international banks and Chinese brokers.

Stock Connect Isn’t the Solution (Yet)

The Stock Connect program allowing investors to trade between Hong Kong and mainland markets offers some access to A-shares but does not include newly listed stocks. Typically, IPOs are only added to Stock Connect weeks or months after their debut and only if they meet criteria like trading volume and market value.

Even when shares do become available through Stock Connect, access depends on broker-specific rules such as minimum account balances or risk disclosures.

Indirect Access Via Funds and Institutions

Retail investors overseas might gain some exposure by investing in offshore funds that include A-shares or STAR Market stocks. However, such exposure is minor. IPO allocations to these funds are often minimal compared to their total assets, making the impact on an individual investor’s return negligible.

Meanwhile, qualified foreign institutional investors (QFIIs) like Morgan Stanley or sovereign wealth funds can directly invest in mainland IPOs after obtaining regulatory approval. These programs (QFII/RQFII) allow institutional giants to bypass many of the restrictions imposed on retail investors, but they require foreign-exchange registration, compliance protocols, and a physical presence in China’s financial ecosystem.

Outlook and Market Context

China’s CSI 300 Information Technology Index is up 32% year-to-date, outpacing the broader CSI 300 (+17%) and Hong Kong’s Hang Seng Tech Index (+24%). This underscores strong market momentum in China’s tech sector especially in semiconductors and AI.

Yet, this rally remains domestically driven. Unless regulatory changes are made, foreign retail investors will continue to face barriers to direct participation in China’s most lucrative tech listings. For now, institutional channels and indirect fund exposure remain the only viable paths.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Winkelmann

Political

Economic

Does the European Union — 27 states, 450 million people, politically fractious even in the best of times — need to expand even more? The answer, in the European way, is a qualified and equivocal yes.

Nine countries are officially in line to join the bloc, and EU officials have recently hinted some may be added by 2030. The European Commission's latest progress report exposes the gap between ambition and readiness. Tiny Montenegro has quietly done much of the hard work required for accession; Albania, Moldova and Ukraine are far behind. Others are unlikely to join anytime soon.

If handled well, enlargement can enhance Europe's security and credibility as a democratic bloc. It could prove particularly helpful at the moment, as Russia's aggression, America's inward turn and China's expanding footprint have made regional integration more of a strategic imperative. The likely alternative is a union ringed by fragile, easily coerced states whose instability could spill across Europe's borders.

Economically, too, the logic of expansion is sound. A previous round of entrants in 2004 lifted the new members' gross domestic product per capita from 59% of the EU average to 81% by 2022; living standards rose sharply, alongside huge improvements in infrastructure, services and life expectancy. Existing members gained a larger market, smoother supply chains, more regional stability and hence greater prosperity: Income per person is about 10% higher than it would've been.

But such gains aren't automatic, and any additional enlargement must be handled with prudence. Adding small countries such as Montenegro and Albania is a low-cost, high-leverage option. It should bolster a vulnerable region, strengthen border and migration management, and reward genuine reform efforts. The benefits of such additions are likely to significantly outweigh the risks.

Ukraine's bid demands a subtler calculation. Its size, industrial capacity and military resilience could one day make it a strategic asset. Yet a live conflict, vast reconstruction needs, governance problems and political sensitivities all complicate the case. Here the EU needs a more flexible approach that prioritizes deepening ties under existing agreements for matters such as trade, energy, and customs and regulatory alignment, while laying the groundwork for full membership down the road.

Two further principles should guide the enlargement process.

One is that the EU should be mindful of how it wields leverage over aspiring members. It has long insisted on judicial independence, transparency, rule of law and other good-governance benchmarks as prerequisites to accession. But leaving candidates in a perpetual waiting room erodes the bloc's credibility and potentially cedes leverage to outside powers. The EU should offer better interim rewards for progress — such as earlier market access, sectoral integration and deeper participation in EU programs — while imposing clear penalties for backsliding.

Next, the EU must reform itself if it wants to stay governable. It should allow for more key decisions (in foreign policy, sanctions and other areas) to be made through qualified majority voting, rather than requiring unanimity among members. It also needs to strengthen its single market: Removing friction in cross-border capital markets, banking, energy and other areas should be paired with reforms to reduce red tape. This isn't just about enlargement: Without such changes, even the current union will struggle to remain functional.

Europe's founding purpose was to bind nations together in peace, prosperity and democracy. The EU can help renew that mission by pragmatically embracing more countries on its periphery. It might also save itself in the process.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Samantha Luan

Forex

Economic

Any yuan appreciation beyond the key 7 per dollar level will likely be short-lived, partly due to pressure on Chinese manufacturers and sluggish foreign investment inflows, a top currency forecaster said.

It's possible for China's currency to cross the widely watched threshold in the next six months or so, before paring its strength to end 2026 at about 7.03 per dollar, according to Jason Schenker, president at Prestige Economics. The economist topped Bloomberg's ranking of analysts of the onshore dollar-yuan exchange rate in the third quarter.

Schenker, who has adjusted his dollar-yuan forecast for the end of next year from his November call of 7.05, also said a strong yuan would offer little strategic value in resolving trade tensions faced by China.

"I'd be surprised if it was below seven for a sustained period," he said, referring to the onshore yuan. "That would be viewed probably as a challenge and risk in China."

Schenker's view differs from more bullish predictions among global investment banks, including Goldman Sachs Group Inc. that recently raised its 12-month forecast for the pair to reach 6.85. His forecast also contrasts with a rare public call by some Chinese economists and former central bank officials for a stronger yuan to help rebalance the world's second-largest economy and reduce trade frictions.

Sustaining currency strength will have knock-on effects on China's exporters, economy and stability by making their goods more expensive, Schenker said. The pressure has become evident after the slump of a key private gauge of manufacturing activities last month, he added.

Around 7.04 per dollar on Monday, the onshore yuan has gained more than 3.5% against the greenback this year.

"Even though the currency strengthened, the Chinese companies are the ones cutting the sale price even more," he said.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Stocks

Market Overview

Asia-Pacific stock markets traded higher following China's decision to hold its benchmark lending rates steady. This move, widely anticipated by analysts, reflects Beijing’s ongoing strategy to maintain monetary policy stability while assessing the country’s economic recovery. The one-year rate is crucial for personal and business loans, while the five-year benchmark guides mortgage lending.

Hong Kong’s Hang Seng index climbed 0.55%, while mainland China’s CSI 300 also gained 0.55%. Futures on the Hang Seng Index pointed even higher, trading at 25,843, up from its previous close of 25,690.53.

Japan’s Nikkei 225 posted a notable gain of 1.95%, closing at 50,474.20, reflecting positive investor sentiment following the Bank of Japan’s decision last Friday to raise its policy rate to 0.75% — a 30-year high. The broader Topix rose 0.86%.

South Korea’s Kospi index surged 1.68%, boosted by strength in technology and chip stocks, while the smaller Kosdaq added 0.99%. In Australia, the S&P/ASX 200 rose 0.85% to close at 8,694.90.

India's Nifty 50 also followed the regional trend, advancing 0.58% to 26,115.95.

Global Sentiment

The upbeat momentum in Asia followed a strong close on Wall Street last Friday. The AI trade regained strength after Oracle gained 6.6%, thanks to news that TikTok had agreed to sell its U.S. operations to a new joint venture including Oracle and Silver Lake.

The Nasdaq Composite jumped 1.31% to 23,307.62, while the S&P 500 gained 0.88% to close at 6,834.50. The Dow Jones Industrial Average rose 183.04 points to end at 48,134.89.

Market sentiment remains cautiously optimistic as investors continue to watch China’s economic policy direction, U.S. AI-related corporate developments, and monetary policy shifts in Japan and the broader Asia-Pacific region. China's stable rate decision suggests a preference for gradual support rather than aggressive stimulus, while global investors are weighing the ongoing tech rally amid rate volatility.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Global Surge in Energy Storage Demand

A structural shift in both domestic and international energy needs is propelling lithium-ion battery production to new heights. China, already the world’s dominant exporter of energy storage batteries, is on track to see a 75% increase in global shipments this year. Exports from China have surpassed $65 billion, reinforcing the country’s strategic hold on the global supply of storage systems essential for backing up renewable energy and powering data centres.

The International Energy Agency forecasts a 16% increase in global investment into battery storage facilities in 2025, amounting to $66 billion with UBS predicting an even stronger 2026. These investments align with the exponential power demands from AI data centres, especially in the United States, where solar-plus-storage solutions have become crucial due to stagnating baseload power growth (nuclear, gas, thermal). Chinese manufacturers such as CATL, BYD, HiTHIUM, EVE Energy, CALB, and REPT BATTERO are benefiting the most, dominating the global battery cell supply chain.

China’s Electricity Reform Spurs Profitability in Storage

Internally, China’s most significant energy market reforms in over a decade are turning previously idle battery storage plants into viable, revenue-generating assets. Historically, much of China's battery capacity sat underutilized due to fixed-rate contracts. However, since June 2025, a market-based auction mechanism has allowed storage providers to profit from charging batteries when electricity prices are low and discharging during high demand. As a result, average daily run time for storage systems rose to 3.08 hours in Q3 up nearly 0.8 hours compared to the same period last year.

Additionally, local mandates requiring storage integration into new solar and wind projects are accelerating deployment. China now accounts for approximately 40% of the world’s battery energy storage capacity, having overtaken conventional pumped hydro in total installed storage volume.

Subsidies and Geopolitical Risks

To fuel further expansion, Beijing launched a $35 billion national plan to nearly double battery storage capacity by 2027. Complementing this initiative, 10 provinces have implemented “capacity tariffs” to reward battery operators for maintaining standby power a policy shift described by Jefferies as the most decisive move in over a decade.

However, geopolitical tensions could hinder China’s ability to capture even more of the global market. U.S. restrictions on investment tax credits for projects involving “foreign entities of concern” which includes Chinese companies may slow their growth in North America, a key target market for AI and renewable infrastructure.

China's dual push internal power market liberalization and dominance in global battery supply is fortifying its leadership in energy storage at a critical moment in the global energy transition. While reforms have finally made storage economically viable at home, international demand from data centres and aging grids ensures continued growth. The only major threat lies in rising trade barriers and regulatory pushback from countries wary of overreliance on Chinese technology. Still, for now, the battery boom is China’s to lead and to lose.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

iRobot: From Roomba Icon to Bankruptcy

iRobot, the most well-known of the trio, became a household name thanks to the Roomba vacuum robot. However, its narrow focus on this single product line became a liability as competitors emerged and technology evolved. The company attempted to pivot by seeking acquisition Amazon offered to buy them but the deal was blocked by the FTC, which many believe sealed iRobot’s fate. Still, critics argue that the failure wasn’t only due to the blocked deal. iRobot had long relied on a globalized supply chain, especially in China, which made it vulnerable to tariffs and copycat products. These macroeconomic and competitive pressures eroded its viability, even before the merger attempt.

Rad Power Bikes: Pandemic Boom, Post-Pandemic Bust

Rad Power Bikes capitalized on the surge in micromobility demand during the pandemic, reporting over $120 million in revenue in 2023. But as demand cooled, revenue dropped to $63 million in 2025. The company struggled with battery safety issues and could not afford a recall, which further hurt its brand and operations. The tariffs on imported parts and competition from cheaper Amazon e-bike brands created an uphill battle. Despite strong branding and early success, Rad Power couldn’t diversify or stabilize enough to weather the downturn.

Luminar: Overconcentration in Lidar and Missed Scaling

Luminar’s story reflects the volatility of the autonomous vehicle sector. Initially celebrated for shrinking the cost and size of lidar sensors, Luminar partnered with major auto brands like Volvo and Mercedes-Benz. However, it remained heavily dependent on the success of autonomous driving, which has been slower than expected. With demand and funding cooling, Luminar’s failure to diversify or transition beyond the lidar niche left it financially exposed.

Structural and Systemic Failures

All three bankruptcies reflect broader trends in hardware startups: a surge in early hype, high reliance on overseas supply chains, tariff vulnerabilities, and limited success expanding beyond a core product. They also highlight how external policies like FTC antitrust blocks or tariffs can accelerate decline when firms are already vulnerable.

Ultimately, while each company had unique operational issues, they all shared a pattern of early growth followed by poor adaptation to changing macroeconomic conditions and industry expectations. Their fall underscores the challenge hardware startups face in maintaining long-term viability without continuous innovation and flexibility.