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Wednesday, 4th August 2010
In Business In Japan,

Japanese 10-year yield fall below 1 per cent

Japan's ten-year yields have fallen below one per cent for the first time in seven years following a rise in government bonds, it has been reported.

According to Bloomberg, ten-year bonds also gained for the fifth day in a row following speculation that the continually strong yen will put more pressure on the nation's deflation levels and also up the "purchasing power" of fixed payments from debt.

A strong yen also puts pressure on the Japanese export market as it greatly reduces overseas demand for Japan-made goods.

Koji Ochiai, chief market economist at Mizuho Investors Securities in Tokyo, told the source that the condition of the yields was something also being seen elsewhere.

"Yields are going down not only in Japan, but also globally. That's different from 2003. Japan's yields will stay under downward pressure below one per cent," he said.

The yield dropped to 0.995 per cent, the lowest seen since August 2003, but Ochiai warned it could fall even lower by the end of September.

Written by Kimberley Homer.