1. The yield curve of Japanese government bonds has remained low for a long time: compared with the yield curves of major economies in the world, the yield curve of Japanese government bonds is also at a low level. On March 8, the yield curves of government bonds with maturities of 10 and below were all above 2%, and the yield of government bonds was upside down. China's bond yield curve is basically in the range of 2% to 3%, while Japanese bond yield curve is close to zero, which is undoubtedly the low point of global bond yield.
2. The yield curve of Japanese government bonds is prone to be abnormal: because the Bank of Japan implements the yield curve control (YCC) policy, it regulates the yield of long-term 10-year government bonds, and its target level is relatively fixed, which can only fluctuate within a specified range and is less affected by market factors. However, the yield of government bonds with other maturities is not limited and is greatly influenced by market factors, which will lead to abnormal yield curve of government bonds. Since the end of 20021,inflation in the United States has been rising and global monetary policy has been tightened. Japan's 7-year, 8-year and 9-year bond yields rose rapidly, and the spread with 10-year bonds narrowed. Since the second half of 2022, the yield of 10-year bonds often approaches or even exceeds that of 7-year, 8-year and 9-year bonds, and the yield of Japanese bonds is upside down.
3. The Bank of Japan's monetary policy has a great influence on the yield curve of government bonds: 20 13, 1 June, in order to get rid of deflation and achieve sustainable economic growth, the Bank of Japan set an inflation target of 2% for the consumer price index. In order to achieve this goal, the Bank of Japan took the lead in launching the negative interest rate policy in Asia in June 20 16. The interest rate of excess reserves deposited by financial institutions with the Bank of Japan is -0. 1. After the implementation of this policy, Japan's short-term interest rate and long-term interest rate have fallen sharply, and the long-term interest rate has fallen even more, and the yield curve has become smoother.