JGB Yields Outpace Topix Dividend Yield by Most Since 2007

Japan’s 10-year government bond yield has risen well above the country’s dividend yields, raising prospects of rotation out from stocks into bonds once volatility in the bond market subsides.

The dividend yield on Topix index stocks, currently at around 2.3%, is lower than the JGB’s 10-year compound yield of 2.75%. The gap between the two is the widest since 2007 when the Bank of Japan was in a tightening cycle.