The core driving force of the global market has officially shifted from &#34;liquidity concerns&#34; to &#34;macroeconomic anxiety.&#34; Under this mainline transition, Japanese assets have become the first to bear the brunt.
According to the Chase Wind Trading Desk, Nomura Securities' latest macro strategy weekly report points out that due to Japan's heavy reliance on oil imports and its extreme sensitivity to global economic cycle fluctuations, it has failed to function as a safe-haven asset amid the current rise in geopolitical risks. The once-popular &#34;buy Japan&#34; trading logic has been shaken, and overseas investors are accelerating the liquidation of related long positions.
Nomura warns that this week we need to be vigilant about the continued reversal of positions in Japanese assets. The market may present a pattern of a weak stock market, a strong bond market, a strengthening dollar, and a pressured yen. Investors should closely monitor the developments in the U.S.-Iran conflict and the evolution of global credit risks.
<h2>Market Mainline Shift: From Liquidity Concerns to Macroeconomic Anxiety</h2>
Since late January, global risk aversion has continued to ferment, and the focus of market concerns is undergoing a shift and expansion: from early concerns about excessive investment in AI, potential changes in the Federal Reserve chairmanship under quantitative tightening expectations, and the impact of AI on employment, gradually spreading to private credit risks and geopolitical tensions in the Middle East.
The top three factors were once the main reasons for market anxiety over excessive liquidity withdrawal, but U.S. economic data remains robust, and macro sentiment has not fallen into extreme pessimism. However, last week, private credit issues surfaced, combined with escalating geopolitical conflicts, becoming the last straw that broke the camel's back—global macro sentiment deteriorated sharply.
The direct result of this shift is: U.S. semiconductor and small-cap stocks were sold off, with funds accelerating their escape from risk assets and flowing into long-term bonds in the U.S. and Europe for safety.
<h2>&#34;Buy Japan&#34; Liquidation: The Halo of a Safe Haven Fades</h2>
In the wave of AI industrial transformation, Japan once became an ideal &#34;safe haven&#34; for fleeing U.S. funds due to the surge in semiconductor demand and the productivity dividends of AI.
However, as market anxiety shifted from industrial disruption to global credit risks and geopolitical conflicts, Japan's risk exposure was laid bare—its structural weakness due to heavy reliance on oil imports and extreme sensitivity to global economic cycles caused its safe-haven halo to fade instantly.
This shift in perception is driving overseas investors to accelerate the liquidation of the &#34;buy Japan&#34; positions established since the House of Representatives elections. Although Bank of Japan Governor Kazuo Ueda released hawkish signals last week in an attempt to curb yen depreciation, U.S. investors generally believe that without a clear statement from the Japanese government to combat yen weakness and accept a neutral path for the central bank, even if the Bank of Japan raises interest rates, the terminal rate and neutral rate expectations are unlikely to rise significantly.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/eb006b6d-a844-4d03-bc41-5a4bb51330d6.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/eb006b6d-a844-4d03-bc41-5a4bb51330d6.png"/>
<h2>Last Week's Market Review: U.S. and European Long Bonds in Demand, Japanese Stocks Rise Against the Trend</h2>
Last week, the global market was dominated by three factors: credit concerns triggered by the UK, escalating military tensions between the U.S. and Iran pushing up oil prices, and a U.S. court ruling that deemed the Trump administration's tariffs unconstitutional, suppressing the dollar.
The bond market is characterized by strong risk aversion, with actual yields in G3 countries declining across the board. The 10-year yield in the United States fell by 14 basis points, leading the decline, while Europe dropped by 9 basis points, and Japan remained flat. The yield curves in the U.S. and Europe are experiencing a bull flattening, while Japan is seeing a distorted steepening.
In terms of interest rate hike expectations, the market has priced in the probability of a rate cut by the Federal Reserve in April rising from 19% to 25%, and the probability for June increasing to 64%; the probability of a rate hike by the Bank of Japan in April has slightly decreased to 69%. The terminal rate expectations reflected by the 2-year forward OIS rates have dropped to 3.03% in the U.S. and remained flat at 1.59% in Japan.
In the stock market, performance has become increasingly divergent. The Nikkei index rose over 3%, leading the gains, while European stock indices increased by nearly 1%, and U.S. stocks fell by nearly 1%. Technology stocks are under significant pressure, with the SOX index and MAG7 both down about 2%.
From the foreign exchange market perspective, the U.S. dollar weakened against major currencies except for the yen, which is under comprehensive pressure, with the dollar-yen exchange rate maintaining in the range of 156.0-156.5. <img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fdb82168-56b2-4ca2-a254-8755162614f8.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fdb82168-56b2-4ca2-a254-8755162614f8.png"/>

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Nomura Securities pointed out that the US-Iran conflict has pushed up oil prices, and private credit risks have surfaced, raising market concerns about the deterioration of economic fundamentals. Previously, Japan had attracted capital inflows due to the AI semiconductor dividend, but as anxiety shifted towards energy shocks and recession risks, Japan's structural weaknesses—high dependence on crude oil imports and extreme sensitivity to cycles—have been fully exposed, rendering its safe-haven function ineffective. Overseas investors are accelerating the unwinding of "buy Japan" positions, leading to a pattern of a weakening yen and pressure on Japanese stocks

"Buying Japan" is being closed out