Asia Yields Follow Europe’s to All-Time Lows on Brexit Concern

  • Yields set records in Japan, South Korea, Taiwan, New Zealand
  • Haven demand accelerates ahead of Fed, BOJ meetings this week

Asia bond yields tumbled to all-time lows, following their European counterparts, as the debate in Britain over leaving the European Union helped fuel a global rush for the relative safety of fixed-income securities.

Japan’s 10-year yield fell to minus 0.165 percent, while the figures for five-, 20- and 30-year bonds also slid to records, according to Japan Bond Trading Co. Yields in South Korea, Taiwan and New Zealand tumbled to unprecedented levels, after those in Germany and the U.K. dropped to all-time lows last week.

“Yields will go down until the U.K. referendum” on June 23, said Hideaki Kuriki, a debt investor at Sumitomo Mitsui Trust Asset Management, which oversees $76.8 billion. Even Japan’s negative-yielding bonds are being seen as “a safety asset,” he said.

Haven demand sent the yield on the Bloomberg Global Developed Sovereign Bond Index to a record low of 0.58 percent last week. The rally is accelerating after the World Bank cut its outlook for global growth last week. 

The Federal Reserve is scheduled to meet Tuesday and Wednesday, following data earlier this month showing the slowest job growth in almost six years. Bank of Japan officials gather June 15-16, facing a benchmark inflation gauge that is falling below zero.

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