Japan Issues Negative Yielding Bonds for the First Time Ever

I’d love to get paid to borrow money too. I could envision myself stepping into my local bank, top hat and cane in tow, demanding to speak to the manager. Upon being seated in his office, I’d remove my white gloves and ask him to give me 1 million dollars, which could be invested at my discretion for the benefit of only myself. To this end, I’d demand that, upon receipt of these monies, he pay me an interest rate for safe keeping such a large sum of money. I’d then walk out, bid everyone a good day, give them a tip of the hat, and jog on.

Japan sort of did that tonight.

The Japanese government got paid to borrow money for a decade for the first time, selling 2.2 trillion yen ($20 billion) of the debt at an average yield of minus 0.024 percent on Tuesday.

The sale drew bids for 3.2 times the amount of the securities offered, according to the Finance Ministry. Japanese government bonds of as long as five years in maturity sold at a negative average yield for the first time last month, after the Bank of Japan pushed yields lower across the curve with the announcement of negative interest rates Jan. 29.

Wait for it.

“There aren’t that many bonds available in the market, and the feeling of a lack of supply has strengthened,” said Souichi Takeyama, a rates strategist in Tokyo at SMBC Nikko Securities Inc., who said the average yield may well be below zero. “If investors sell bonds now after having bought them when yields were positive, there’s the risk they won’t be able to reinvest with positive yields later, so they’re reluctant to let them go.”

Fuckery, largess.