You modelled the yield. You did not model what happens to it when the yen moves.

The Bank of Japan held rates at 0.75% at its April 28 meeting. Consensus hold. The normalisation cycle that began in March 2024, the first rate increase in 17 years, has been paused twice now by geopolitical risk from the Middle East. The rate gap between Japan at 0.75% and the US at 3.50 to 3.75% is the widest it has been in a generation. That gap is JPY.

A 5% gross yield on a Tokyo residential position denominated in JPY is not a 5% return for a USD-based investor. It is a 5% return minus 29% currency erosion over a decade. Most entry analysis shows you the yield. It does not show you what the yield buys.

The jurisdiction picture compounds the problem in a way most investors do not expect.

Japan is one of the most open real estate markets in Asia. No foreign ownership restrictions. No buyer levy. No zone limitations. The jurisdiction clears on almost every standard criterion. That is why the analysis usually stops there.

It should not.

The exit liquidity question is where the framework goes next.

Japanese residential resale markets outside central Tokyo are structurally thin. The non-resident mortgage market is near-zero. Foreign buyers acquire cash. That means your exit buyer pool is cash-only, predominantly domestic, and subject to a demographic headwind that is structural and worsening. Japan's population has been declining since 2008. The buyers who would take your position off your hands in five years are fewer in number than the ones who existed when you bought it.

Building depreciation compounds it further. Japanese buildings depreciate under a legal useful life framework. Reinforced concrete at 47 years, wood-frame at 22. A fully depreciated building carries zero book value regardless of market price. That is the exit price assumption most analysis never models.

The akiya narrative tells you Japan is cheap. The framework tells you why.

Most Japan investors have never modelled who buys the asset, at what depreciated value, in what currency. If that number does not exist in your underwriting, a 30-minute scoping call is the starting point.