Japan Five-year Government Bond Yields Fall to Zero

Japanese five-year government bond yields fell to zero for the first time on record as central bank easing and slumping commodity prices drive demand for bonds across the globe.

The yield on the 0.1 percent note due Dec. 20, 2019 fell one basis point to zero, according to data from Japan Bond Trading Co., the nation’s largest inter-dealer debt broker. The decline comes after Germany’s five-year yield dropped to a then-record of minus 0.008 percent on Jan. 2.

Government bonds rallied this month, pushing yields to record lows from London to Sydney and Tokyo, after oil tumbled and traders prepared for the European Central Bank to start buying government debt as soon as this month. A record surplus of deposits over loans at Japanese banks is helping push government bond yields below zero as lenders funneling cash into the safest debt add to demand from the Bank of Japan’s bond-buying stimulus.


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