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All the countries with government debt yields below zero

Photo by Ryan Pierse/Getty Images

Negativity has reigned supreme in 2016, and in more ways that one.

Fuelled by an acceleration of capital flowing from stocks, commodities and higher-yielding, higher-risk debt, almost a third of the world’s sovereign bond market, some US$7 trillion according to Bloomberg, now have yields of less than 0%.

Yes, the once unthinkable notion that investors would be willing to spend more than what they will receive in return is now a reality.

As this simple yet highly effective chart from ANZ’s senior rate strategist Martin Whetton reveals, Japan, following the adoption of a negative interest rate policy from the Bank of Japan in late January, has joined Switzerland in the illustrious ranks of having all of its government bonds out to a 10-year maturity yielding less than 0%.

Think about that. Investors in nominal terms, yet alone real terms, are willing to receive less than their initial investment over the next 10 years.

That doesn’t say much for where global growth is heading, nor the outlook for markets further out in the risk spectrum.

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