Japan had a double whammy of economic news today.
First, the Japanese sovereign bond yield for 2 year bonds went NEGATIVE!
(Bloomberg) — Japanese 10-year bond yields fell to a record low, following yields on other maturities down to unprecedented levels, as the Bank of Japan scoops up debt.
Ten-year yields slid 1 1/2 basis points to 0.31 percent as of 2:40 p.m. in Tokyo, according to data from Japan Bond Trading Co., the nation’s largest inter-dealer debt broker. The previous low was 0.315 percent set in April 2013.
The Bank of Japan this month maintained its unprecedented stimulus as Governor Haruhiko Kuroda’s battle to stoke inflation faces challenges from tumbling oil prices. The central bank plans to boost the monetary base at an annual pace of 80 trillion yen ($666 billion), it said in a statement.
If fact, sovereign yields for maturities of 4 years or less are negative as well.
And even though Japanese sovereign and MORTGAGE rates keep declining, housing starts fell -14.3% in November.
This is indeed a double whammy for the Japanese economy. A third whammy is the YoY decline in real Japanese household income, even though the Bank of Japan has been rapidly expanding their balance sheet.
Whammy Kuroda? Or Whammy Abe?
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