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Bond Anomaly Creeping Into Japan as Curve Near Inversion

  • 10-year yield falls toward 2-year yield on global bond rally
  • Japan faces sales-tax hike this year amid U.S.-China trade war
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BlackRock's Rieder Says Rates Could Still Rally Another 25-Basis Points
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The bond market’s economic canary in the coal mine looks poised to hit Japan.

The country’s benchmark 10-year yield is on track to fall below its two-year equivalent for the first time since the collapse of the Japanese economic bubble in 1991. Known as an inverted yield curve, longer-term yields below shorter ones are unusual in developed markets and often interpreted as a harbinger of recession.