That created fresh worries for the Japanese government-bond market.

WSJ: Japanese Stocks Fall Sharply

Japanese bonds, the second largest bond market, has near zero yield.

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More important is the role that Japanese banks are playing in propping up the bond market.

ECONOMIST: Japan��s bond market

The market now expects domestic Japanese Government Bond (JGB) holders to cash out and seek higher yield solace in U.S. Treasuries and other high-grade foreign bonds.

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Investment bankers say that some Japanese companies are so worried about rising public debt leading to a bond-market crash or to inflation (how else to get rid of debts of this size except by printing money?) that they are trying to shrink their domestic operations and expand their foreign ones.

ECONOMIST: Japanese finances

Indeed, there are good reasons for thinking that America's sophisticated corporate-bond market may be what saves its firms from the fate of their Japanese counterparts.

ECONOMIST: Corporate debt

For Japanese stock (and bond) investors, the question must be: is the most of the market move behind us, or do attractive returns still lie ahead?

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