Question
Based upon following information, answers the given questions: Japanese 10-year government bond yields turned negative for the first time ever Tuesday, and now stand at
Based upon following information, answers the given questions: Japanese 10-year government bond yields turned negative for the first time ever Tuesday, and now stand at minus 0.03%. The feat has already been recorded elsewherethe Swiss 10-year bond yields minus 0.4%but this is the first time a member of the Group of Seven economies has seen such a development. Germany got close last April, when 10-year yields fell to 0.05% as euphoria about European Central Bank bond purchases gripped investors, but markets balked at going subzero at that point.
Source: The Wall Street Journal
Explain the above scenario of negative yields with the help of traditional theories of term structure. (Fixed Income securities and analysis)
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