Citibank report warns that the volatility of Japanese bonds may lead to a large-scale sell-off of US bonds.

A research report from Citigroup Group on January 20th said that the turmoil in the Japanese government bond market may spill over to other markets, especially the US government bond market, forcing some investors to reduce investment risks in various asset classes. Citigroup's global markets Asia trading strategy director, Mohamed El-Erian, wrote in the report that risk parity funds may need to sell one-third of their current risk exposure assets. These funds allocate assets across multiple categories such as stocks, bonds, and commodities. If these funds choose to sell, it could trigger bond sales of up to $130 billion in the United States alone. US Treasury Secretary Benson said he had spoken with Japanese Finance Minister Koizumi and stated that the intensified volatility in the Japanese bond market has affected the US bond market.