Tokyo

The global bond selloff, which two weeks ago looked like a chaotic stampede for the exits, has eased somewhat in recent days. But that does not mean the fire has been extinguished. Rather, the flames have spread elsewhere, and now the fiercest blaze is raging in a market that for decades was considered a bastion of stability. Japanese government bonds are facing a moment of truth. Yields on ten-year bonds have surged to levels unseen since September 1996 — an era when Bill Clinton was president of the United States and the word “smartphone” did not yet exist. Thirty-year bond yields have reached an all-time record high. And this is happening not just anywhere, but in Japan — a country that spent decades battling deflation and whose bonds seemed like a permanent refuge of calm. Now that refuge is beginning to crack.

In recent years, Japan’s debt market has lived in a reality unlike that of other developed nations. While the Federal Reserve, the ECB, and the Bank of England fought inflation by raising interest rates, the Bank of Japan stubbornly maintained an ultra-loose monetary policy. This gave rise to the so-called “reflation trade” — investors betting that Japan would finally escape its deflationary spiral, inflation would begin to rise, and the central bank would eventually be forced to normalize policy. It was a profitable trade: Japanese bonds fell in price, yields crept higher, and traders made money.

But now, as Thomas Mathews of Capital Economics warns, that trade is nearing a critical point. “Most of the recent rise in yields has been benign,” he wrote in a recent note. In other words, the market had gradually priced in normalization, and that was considered a healthy process. But now,...

On Wednesday, shares of the Japanese company KakakuCom Inc made a real leap that caught many market watchers off guard. The stock soared by seventeen percent to hit 3,425 yen per share. Prices haven't climbed this high since late 2021 — nearly three and a half years ago. For the market, it was a glaring signal: something serious is happening, and investors are rushing to buy shares before the price runs even higher.

The reason behind such a fierce rally came all the way from Sweden. That's where the investment firm EQT is based — the company that became the headline act of the day by announcing its designs on a Japanese business. When a major player like that publicly states it's ready to buy out an entire company, the market reacts instantly. A seventeen percent single-day jump speaks for itself.

EQT laid out its intentions with crystal clarity: the investment group plans to launch a tender offer to fully acquire Kakaku from the public market and take it private. Simply put, the Swedes want the entire Japanese service for themselves, delisting it from the exchange.

The price tag is impressive — the whole business is valued at roughly 593.5 billion yen, which in dollar terms comes to about 3.76 billion. For each individual share, EQT is ready to pay exactly 3,000 yen. That's the very number that fueled the frenzy: at the time of the announcement, the stock was trading noticeably cheaper, so traders rushed to buy it hoping to pocket the difference as the price climbs toward the offer.

Taking a publicly listed company private is a classic investment fund maneuver. The point is to gain full control, stop worrying about quarterly filings with the exchange, and calmly — away...