For the first time Japan has sold government bonds with a negative yield


Tuesday, 1 March, the Japanese Ministry of Finance sold at auction a package of state bonds for a period of ten years at a price of 101,25 yens for paper, writes The Wall Street Journal. The yield on these bonds is -0,024%.

These are the first bonds with a negative yield, implemented by the Japanese authorities since 9 February. Then the yields on government bonds with ten-year maturity — which for any government is considered a benchmark reflecting the state of the public debt for the first time moved into the negative zone.

Now at the auction won the bid, -0,024%, while the shares trade at a yield -0,072% apiece. Buying bonds for $10 thousand in ten years, the investor will annually pay $7,2 for the storage of papers.

The decline in the yields of Japanese bonds followed the introduction in late January, the negative interest rates. Thus the Bank of Japan trying to fight against the stagnation and deflation, promoting their policy of “quantitative easing”: the authorities will buy up bonds from investors, either to take with them a percentage of the holding of securities.

Thus obtained money will be reinvested into the economy, increasing inflation (which for the entire 2015 year amounted to only 0.2%).