China (Japan) fact of the day

China’s long-term bond yields have fallen below Japan’s for the first time, as investors bet that the world’s second-biggest economy will become bogged down by the deflation that has long afflicted its neighbour.

A rally in 30-year Chinese government bonds has pushed their yield down from 4 per cent in late 2020 to 2.21 per cent on Friday, as Beijing cuts interest rates to boost its flagging economy and Chinese investors pile into haven assets.

Japan’s long-term bond yields, which for years were stuck below 1 per cent, have risen above China’s to 2.27 per cent, as Tokyo normalises monetary policy after decades of deflation.

Here is more from the FT.