Negative real yields on sovereign debt here to stay

With aggressive monetary easing by the European Central Bank, Bank of Japan and the Bank of England expected to extend well beyond this year, predictions in the latest poll were for real yields to be negative on German, Japanese and UK bonds.

BENGALURU: Real yields on major sovereign bonds are deeply negative and expectations for positive returns anytime soon have disappeared as aggressive monetary easing and asset purchase programmes have much further to run, a Reuters poll showed.

For well over a decade, top central banks have adopted aggressive monetary policy tools in an attempt to suppress long-term borrowing costs to keep credit flowing to drive their economies back to higher growth and inflation.