CHART OF THE DAY: We Are Japan, Part #54903512

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If you look at the progression of the US stock market boom and bust, it’s easy to see comparisons to the long deflationary slog experienced by Japan.

What’s more, we have a similar monetary structure (our own currency, with mostly domestically-owned, domestically denominated debt), and we’re facing a similar crisis (too much private sector debt).

Anyway, the Treasury market shows it as well.

The spread between current Treasury yields and yields on Japanese Government Bonds has hit a new multi-decade low.

And beyond that, the progression of the Treasury yield collapse has has gone at a similar pace.

This chart comes from Nomura’s Richard Koo, lining up 10-year yields between Japan and the US at the start of their respective crisis.

Bottom line: Yields have a lot longer to fall if you think Japan is a good guide.

yield treasuries japan

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