Japan Government Bonds - Yields Curve

The Japan 10-Year Government Bond currently offers a yield of 1.076%. This yield reflects the return investors can expect if they hold the bond until maturity. Government bond yields are critical indicators of economic confidence and investor sentiment.

The yield spread between Japan 10-Year and 2-Year government bonds is 49.4 basis points (bp), reflecting the difference in yields between long-term and short-term debt.
Typically, long-term bonds carry higher yields than short-term ones.
Current observation: Normal Convexity in Long-Term vs Short-Term Maturities.

Japan Central Bank Rate stands at 0.25%, following the most recent adjustment in July 2024.

According to Standard & Poor's agency, the Japan credit rating is A+.

The current quotation for Japan 5-Years Credit Default Swap is 20.47 basis points. Correspondingly, the implied probability of default is 0.34%.

Table of contents

Japan Yield Curve

A Yield Curve is a graph that shows the relationship between interest rates (or yields) and different maturities of debt for a specific borrower, often government bonds. It typically plots yields on the y-axis and maturities on the x-axis, ranging from short-term to long-term bonds.

The shape of the yield curve gives investors insights into market expectations for interest rates, economic growth, and inflation. A normal yield curve, where long-term rates are higher than short-term, suggests economic growth, while an inverted curve, where short-term rates are higher, can indicate an upcoming recession.

Japan Yield History

This table presents the historical values of the yield curve, with data points collected at the end of each year.

By analyzing these values over time, one can observe trends and shifts in economic sentiment and monetary policy that impact investor expectations about future interest rates and economic growth.

Japan Yield Analysis

Normally, longer-duration interest rates are higher than short-duration. So, the yield curve normally slopes upward as duration increases. For this reason, the spread (i.e. the yield difference) between a longer and a shorter bond should be positive. If not, the yield curve can be flat or inverted.

The curve convexity is measured considering some key bond durations (usually 2 years and 10 years, but also other maturities).

Japan Credit Ratings

A credit rating is an assessment of the creditworthiness of a borrower (in general terms or with respect to a particular debt or financial obligation).

Japan Interest Rates

A bank rate is the interest rate at which a nation's central bank lends money to domestic banks, often in the form of very short-term loans.

Japan Credit Default Swaps

The term credit default swap (CDS) refers to a financial derivative that allows an investor to swap or offset their credit risk with that of another investor. To swap the risk of default, the lender buys a CDS from another investor who agrees to reimburse the lender in the case the borrower defaults.

Japan 10Y Bond Yield Spread

The Japan 10Y Government Bond has a 1.076% yield.

Japan Government Bonds Prices

Price Simulation: bonds with a face value of 100, with different coupon rates.