Would you ever buy JGBs or JGB funds?

As you know, Japan has a much worse (gross) debt-to-GDP ratio than the US and UK. However, the gap narrows when you include its foreign assets and work out the net debt-to-GDP ratio.

And foreigners own only about 15% of JGBs, but roughly 30% of US Treasuries and UK Gilts. Surely this would make JGB prices/yields less sensitive than Treasuries and Gilts to moves in the home currency?

Plus, Japan’s annual fiscal deficit has shrunk over the past two or there years – it might rise this year though… The UK Labour government may or may not cut spending, but neither party in the US looks likely to shrink the deficit or debt and the Federal deficit is growing.

Would you ever buy JGBs or JGB funds?

I currently have no JGBs or JGBs funds, including iJGB funds, because of the high debt-to-GDP ratio and the economic outlook for this country.

Gross debt to GDP ratio

Japan: 254% in 2024

US: 123% in 2024

UK: 104% in 2024

Net debt to GDP ratio

Japan: 160% in 2022, in 2024

US: 95% in 2022, 98% in 2024

UK: 90% in 2022, 2023, 2024

https://www.economist.com/graphic-detail/2024/07/19/can-america-afford-its-debts

https://tradingeconomics.com/united-kingdom/government-debt-to-gdp

https://financialpost.com/executive/executive-summary/7-myths-canada-government-debt-deficit-taxes

https://en.wikipedia.org/wiki/List_of_countries_by_government_debt#Government_debt_as_a_percentage_of_GDP

Japan has a positive NIIP – the difference between its foreign assets and foreign debts – equal to 63% of GDP.

The US and UK have negative NIIPs equal to 80% and 26% of their GDPs.

https://en.wikipedia.org/wiki/Net_international_investment_position#List_of_countries_and_regions_by_net_international_investment_position_(NIIP))

Japan has 1.3 trillion dollars of foreign reserves.

The US has 243 billion dollars.

The UK has 189 billion dollars.

https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves#List

Foreigners owned 14% of Japanese government bonds in March 2024

https://www.mof.go.jp/english/policy/jgbs/reference/Others/holdings02.pdf

Foreigners owned 31% of US government debt in December 2023

https://sgp.fas.org/crs/misc/RS22331.pdf

Foreigners own 31% of UK government bonds in December 2022

https://www.omfif.org/2023/07/increase-in-foreign-investors-will-help-to-stabilise-uk-gilt-market/

Japan’s annual fiscal deficit

https://tradingeconomics.com/japan/government-budget

US federal budget

https://tradingeconomics.com/united-states/government-budget

UK government budget

https://tradingeconomics.com/united-kingdom/government-budget