Japan’s Post Office Is an Unlikely Global Bond Powerhouse

The long era of superlow interest rates has reshaped the financial world in some surprising ways. For example, who comes to mind when you think of major players in the global fixed-income market? There are the giant Pimco, BlackRock, and Vanguard funds, of course. But how about Japan’s post office?

Strictly speaking, we’re talking about Japan Post Bank Co., the banking unit of Japan Post Holdings Co., a publicly traded company majority-owned by the government. The postal bank held $577 billion worth of bonds outside its home market in March. That’s more than the investment-grade portfolio at Fidelity Investments or the fixed-income holdings at Britain’s Standard Life Aberdeen Plc. And it’s a big change from a decade ago, when the foreign bond portfolio at Japan Post Bank was negligible.