Two decades after Japanese‐Peruvians and other South Americans of Japanese descent began to migrate back to Japan, the return‐migration phenomenon has ended. Induced by the Japanese government in the name of shared ethnicity, Japanese policymakers now largely regard return migration as a failed policy. It failed because return‐migrants did not, in the view of policy‐makers, assimilate, integrate, or “make it” in Japan as expected. Thus, once‐imagined ethnic bonds ceased to exist in Japan. However, ethnic bonds sustained themselves well outside Japan. The Japanese‐Peruvian community in Peru has thrived and maintained continuous ties with Japan. What explains the rise and fall of diasporic ethnic bonds? Drawing on my ethnographic research in Japanese‐Peruvian communities in Peru and Japan, I found that diasporic ethnic bonds are cultivated or weakened depending upon where diasporic populations are located in relation to their ancestral homeland, and how such ties are utilized, for what, and by whom.