Japan’s Bonds Hold Above 0%

America

Are We Turning Japanese?

Japan’s Bonds Hold Above 0% Even as More Debt Goes Negative

While bond yields globally have plunged during the pandemic, Japan’s benchmark is actually higher than a year ago. The spread between Treasuries and JGBs dropped by over 130 basis points in 2020 after the Federal Reserve slashed rates close to zero, and bets mount that the U.S. central bank could introduce a negative-rate policy.

DYI:  That is my thought process as well for U.S. Treasury debt out as far as ten year bonds to go negative during the next stock market bear market.  The U.S. 30 year Treasury could very easily trade below 0.50% as well.  As far as I’m concerned will mark the end of the bond market bull market of a lifetime that all began on 9-30-1981 with the 10 year T-bond interest rate peaking at 15.84%!

 

Current Yield as of 8-10-2020

0.57%

Short of a Lifetime?

Rates could stay extremely low for far longer than most will believe possible thus shorting long bonds fruitless and painful as losses pile up.  Eventually long dated bonds will become bear market short paradise however that will be many years in the future.  For now valuation justify precious metals –[along with their respective mining company shares] – and short term bills/notes waiting for valuations to change whether it be stocks, long term bonds, or precious metals.

Till Next time      

DYI