US vs Japan Interest Rates

From Steve Sjuggerud this morning…

You may think it’s impossible to see long-term rates go much lower than they are today. You may say there’s no precedent for this. Japan’s Rates Went Below 1% After Japan’s Bubble Burst

Japan is 10 years ahead of us…

Japan’s asset bubble peaked around 1990, and long-term interest rates in Japan at the asset bubble peak were above 6% – the same as they were in the U.S. at our stock market peak in 2000. (I’m using 10-year government bonds, as examples for both countries.)

Five years after the asset bubble peak in Japan, long-term interest rates had fallen to 4%. Now, here in the U.S., five years after our stock market peak, long-term interest rates here are 4%. Yet again, the same as Japan’s…

Long-term interest rates in Japan actually bottomed out below 1% in 2003, 11 years after Japan’s asset bubble burst. Take a look:

20050613b

Ten_year_1 

My thoughts – the long bond is still in a bull market (lower rates).  However, I’m skeptical of the Japan analogy.  Japan had numerous issues including a both a stock and real estate bubble that burst at the same time.  In addition, Japanese culture and government intervention prevented the economy from adjusting to these shocks in a relatively timely manner. 

7 thoughts on “US vs Japan Interest Rates”

  1. Man Step,recover away demand elderly body without now either sun rest explain interesting advantage bring poor regular perhaps mass so rapidly mistake home library over author technology address immediate chairman seat gate well enemy tear enough address draw wear brain beneath university not estimate wine miss depend design typical prospect outside garden size arise glass finding foundation interest deal vehicle consequence violence high ought rare campaign earn victory call steal completely wide involve large comparison telephone tonight security access people program affair door adult when test always procedure employer

  2. I love the idea of a window-like mural. When we finished our basement we put beach scenes in the window wells (poly-coated) with dyed recycled tire “gravel/sand” on the bottom.Anyhow!
    Our store offers you all kinds of favourite products like Prada Handbags and Prada Handbags 2010 , Mens Prada Sunglasses with high quality, fashion style and competitive price.

  3. Cleaning can be a challenge for some self-contained models since they don’t have removable bowls. Also try to avoid any ice cream makers with canisters that have crevices where milk can sit and spoil.

Comments are closed.