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New Zealand Sees First Negative Bond Yield as Rate-Cut Bets Rise

The country joins Japan, Germany with sub-zero bond yields
Central bank’s aggressive policy helps to drive the move

A pedestrians walks past the Reserve Bank of New Zealand in Wellington. — A pedestrians walks past the Reserve Bank of New Zealand in Wellington.
Photographer: Birgit Krippner/Bloomberg

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September 9, 2020, 3:05 AM UTCUpdated onSeptember 9, 2020, 6:21 AM UTC

New Zealand’s benchmark three-year bond yield slid below zero for the first time on Wednesday as expectations rise for the central bank to take its key interest rate negative.

The nation’s April 2023 bond yield dropped as much as 6.5 basis points with mid-level yields touching -0.006%. Swap markets are already pricing for the Reserve Bank of New Zealand to cut by 50 basis points to -0.25% by the fourth quarter of next year.