Why Japanese Investors Are Dumping U.S. Treasuries

Japanese investors have been shifting from US Treasurys to other US assets due to high currency hedging costs, which reduce the attractiveness of Treasurys. Despite this, they are investing heavily in US corporate bonds, stocks, and agency debt. This shift reflects a broader trend of investors moving up the risk spectrum due to low returns on safe assets. The types of investors involved range from the Bank of Japan to insurers and pension funds. The future of this trend depends on US Treasury yields and hedging costs.

What is the significance of the $1 trillion mark in relation to Japanese investments in US assets?

What factors are influencing Japanese investors to raise their risk profile?