Japan is one of the world’s largest net creditors. Its institutional investors’ overseas holdings pushed the country’s net external assets, which include holdings of foreign securities, to a record last year, according to official data, creeping past Y533tn ($3.4tn). Life insurers are among the largest investors and, for decades, their savings have helped steady global markets. What happens when that flow reverses?

Last month, yields on Japan’s 30-year government bond surpassed the record high of 3.28 per cent reached in September. That may not seem very high for some markets, but for Japan it is a big deal. Sovereign yields have stayed near zero and domestic yields have been suppressed by the Bank of Japan’s ultra-loose policy for almost three decades.

Until now, Japanese institutional investors have poured capital into global credit in search of returns. US Treasuries and European sovereigns have been particularly favoured. The result has been to push global borrowing costs lower than they could otherwise have been.