Nikkei Plunges 5% As Japan 10-Year Yield Goes Negative First Time

Japan 10-Year Yield Goes Negative First Time

More, more, more scream the investors. Apparently the Bank of Japan is not doing enough to kill the Yen. That’s the message today as the Nikkei plunged 5% even though yield on the Japanese 10-year government bond went negative for the first time in history.

Bloomberg reports Kuroda’s Three Strikes Drive 10-Year Yield Below Zero.

Japan’s benchmark 10-year yields touched a record low of minus 0.01 percent Tuesday in the wake of the Bank of Japan’s surprise decision on Jan. 29 to charge some lenders on excess reserves held at the central bank. Governor Haruhiko Kuroda drove down yields to unprecedented levels after initiating a monetary base target in April 2013 and a boosting the BOJ’s bond purchases to a record in October 2014. He said last week he could lower deposit rates further or boost bond buying if needed.

Through the Floor

Nikkei Plunges 5%

Bloomberg reports Japan’s Topix Index Extends Decline to 5%.

It’s been a rough couple of weeks for Japanese bank investors.

The shares were the biggest losers after the Bank of Japan decided to introduce negative interest rates late last month, and now they’re being clobbered by a global selloff of financial stocks stemming from concerns about the health of their European competitors.

Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., Japan’s biggest lenders by market value, fell more than 8 percent Tuesday in Tokyo. The companies are now trading at less than half the book value of their assets.

“Japan’s market is getting hit across the board amid the global selloff, and bank shares are being hurt by concerns about the BOJ’s adoption of negative rates,” said Takashi Miura, a Tokyo-based analyst at Credit Suisse Group AG. “Traders are jumpy about the possibility of more easing steps by the BOJ, so it’s hard to buy shares.”