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French 10-year bond yield falls to record low under 1.8%

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(Globalpost/GlobalPost)

The yield on 10-year French government bonds fell to a record low of below 1.8 percent in trading on the secondary market Friday as Japanese investors snapped up European debt after the Bank of Japan flooded the market with easy money.

At 0950 GMT the rate of return for investors on benchmark 10-year French government bonds fell to 1.763 percent, from 1.870 percent at close of trading on Thursday.

The yield on French 10-year government bonds first fell below 2.0 percent in secondary trading in December.

On Thursday, France for the first time placed 10-year bonds on the primary market at a yield of under 2.0 percent, at 1.94 percent.

Bond analysts attributed the development to the Bank of Japan's measures which will provide lots of liquidity to the market.

On Thursday the Bank of Japan embarked in its boldest attempt to drag the economy out of decades of crushing deflation, unleashing a flood of easy money that will see the central bank buy up huge amounts of Japanese government bonds.

In turn Japanese investors are looking to acquire investments abroad, with French debt seen as safe but offering higher returns than German government bonds, the safest but lowest-yielding bonds in the eurozone.

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http://www.globalpost.com/dispatch/news/afp/130405/french-10-year-bond-yield-falls-record-low-under-18-0