Safe-haven assets gain as 10-year JGB yield declines to negative territory

Global equities for the most part are rallying and so are safe-haven currencies.  While the European bourses are up between 1.4% and 2.5%, the Nikkei fell 0.3% to 20,0014, its first annual loss since 2012.

Negative data in Japan dampened the mood for the Nikkei.  The industrial production readings for November came in better than expected but lower than the prior readings. The month on month reading declined 1.1%, down from 2.9% and better than the -1.5% analysts’ consensus.  The annual reading was 1.4%, better than the 0.6% eyed, but lower than the 4.2% prior reading.  The retails sales data disappointed across the board and saw the prior months revised lower.

The 10-year yield for Japanese government bonds fell to 2 basis points to -0.012%, the first time since Sept 2017.  The last time this key yield fell into negative territory, Japanese stock weakness persisted. The demand for safe-haven assets has been strong going into year-end and the drop in Japanese yields should come to no surprise.  Recent Japanese government data show that foreign investors are buying record amounts of Japanese bonds.  If the recent low in stocks hold, we could see this negative slide for Japan yields be temporary.

USD/JPY continues to give back its Christmas gains and is once again approaching the psychological 110 handle.  If global sentiment becomes negative again, we will see the yen appreciate again alongside US Treasury bonds will rise as yields continue to slide.  The data is softening and the US/China trade war continues to weigh on Japan.  For now, 110 may provide a bounce, but if a sustained rally does develop, we could see 108.50 targeted.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.