Mizuho Sees 0.8% U.S. Yield as Gross Sings ‘Turning Japanese’

U.S. 10-year note yields will drop to match those on Japanese government bonds, according to the investor at Mizuho Asset Management Co. who predicted the rally in Treasuries that began in 2010.

Prospects for deflation and additional monetary easing by central banks will push the rate to 0.8 percent at the end of 2012, said Akira Takei, head of the international fixed-income department for Mizuho Asset, a unit of Japan’s third-biggest listed bank. That’s about half prevailing U.S. interest rates and in line with current yields on Japanese government bonds that are the lowest among the world’s 15 biggest debt markets.