Japan's equity market yield in fine, rare form

A rare event occurred this year. As the Japanese stockmarket slumped to its mid-March low, the falling index pushed up the dividend yield sufficiently for it to overtake the yield on benchmark 10-year JGBs (Japan government bonds). The last time there was such a negative yield gap was in 2003, and the time before that was 1998. We suspect the last time before 1998 where equities yielded more than bonds was before the Second World War. Such an unusual occurrence should be treated with respect - the Tokyo market is cheap on a very big scale. The years 1998 and 2003 were marked by doubt, fea...