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Japanification the Scourge Threatening to Go Global in 2020

  • Even U.S. may succumb to negative yields if a recession hits
  • U.K., Australia are also candidates to follow euro area’s path
Commuters As Japan’s Wages Fall Again, Adding to Concerns Over Tax Hike
Photographer: Kiyoshi Ota/Bloomberg
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First it was Japan. Then Europe. Now investors are scanning the world for the next outbreak of stagnant inflation and tumbling yields.

The malaise of “Japanification” burst into the mainstream this year, leaving in its wake a record amount of negative-yielding debt. Quantitative easing and a low-rate regime in Europe delivered banner returns on the region’s bonds -- at the expense of bank profits and retirement savings. Many say it recalls Japan’s lost decade.