Global Bond Markets Shackled to Japan by Kuroda’s 0% Quest

Almost two weeks ago, the Bank of Japan governor unveiled a plan to anchor yields on 10-year bonds at around zero, after trillions of yen of quantitative easing and the introduction of negative interest rates failed to revive the economy. While the shift was ostensibly aimed at helping the financial industry and quashing deflation, investors far and wide responded by pushing yields lower. From Japan to the U.S. and Europe, volatility all but vanished and correlations rose to levels rarely seen in the past.

It’s perhaps the clearest example yet of how the drastic steps that central banks have taken to revive their economies following the financial crisis have imbued just about every facet of today’s $100 trillion global debt market -- even as more and more question whether they’re running out of options.