Why Japanese Bond Prices Follow American Ones

Japanese government bonds have moved with U.S. government bonds five times in ten months. Here's why: Japan's biggest banks, insurers, and pension fund own huge amounts of U.S. bonds and watch U.S. prices closely before Tokyo opens each day. They price Japanese bonds based on what U.S. bonds are worth. That link holds unless Japan's central bank changes course. The pattern stayed put on June 18, though what happens next depends on U.S. bond prices shifting.