Germany 10-Year Bond Yield Drops Below 1% as GDP Shrinks

German bonds rose, pushing 10-year yields below 1 percent, boosting speculation that the European Central Bank will have to act to avert the kind of slump that stymied economic growth in Japan for more than a decade.

Euro-area bonds from Ireland to Greece advanced as data showed Europe’s largest economy shrank more in the second quarter than analysts predicted and France’s stagnated. While record-low yields cut borrowing costs for governments in capital markets, they also signal skepticism that the ECB can reignite the economy without the money-printing policy that’s been pursued by counterparts in the U.S., U.K. and Japan.