Japan may pull huge sums out of US bonds and stocks now that its own bonds finally pay a decent return — bad news for US markets.

• Japan's 30-year government bond now pays about 4%, so Japanese pension funds and insurers can earn a safe return at home instead of parking cash in America.
• Japan's finance minister said she wants GPIF, the world's biggest pension fund, to shift money out of foreign assets and into Japanese ones.
• That fund alone holds around $230 billion in US Treasuries plus hundreds of billions in US stocks — money that could start flowing home.
• Buying at home means no currency risk, since the returns come in yen instead of dollars.
• After the announcement, the yen rose and Japanese bond rates fell the most in a month, a sign other Japanese banks and insurers are watching closely.

Outlook: If Japanese institutions follow GPIF's lead, a steady stream of money could leave US markets, pushing up American borrowing costs.