The $5 Trillion Quandary as Negative-Yielding Japanese Debt DoublesBy
Nearly three-quarters of JGBs offer yields at or below zero
Kuroda admits adverse effects of stimulus for bank earnings
The amount of Japanese government bonds in the market offering negative yields has doubled this year to more than 600 trillion yen ($5.3 trillion) and that’s a major headache for the finance industry.
After the Bank of Japan’s surprise decision on Jan. 29 to implement negative interest rates on some deposits, almost three-quarters of total JGBs would offer no returns or even burn a hole in balance sheets if bought now. The government got paid to borrow 2.2 trillion yen for a decade for the first time at an auction last week, and set a record-low 0.8 percent coupon for an auction of about 800 billion yen of 30-year securities Tuesday…
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