In November 2024 China’s 30‑year yield slipped beneath Japan’s for the first time, sparking talk of “Japanisation”. A year later the 10‑year yield crossed the same line, a move Bloomberg called a “historic crossover” that revived worries of a deflationary slide similar to Japan’s 1990s slump. The pattern now extends across the curve in global markets.

March saw two‑year Chinese yields undercut Japan’s, and last week the 12‑month bill briefly did the same, completing the maturity spectrum. Yet three‑month yields still sit about 15 basis points higher, meaning full convergence remains pending. Investors cite China’s sluggish growth, a strained property sector and massive debt overhang as forces driving yields lower, while Japan prepares a modest rate hike to 1 % soon.

With Japan emerging from deflation and likely raising rates, its yields sit at levels once considered lofty for the country. China’s bond market, meanwhile, offers what many see as a cheap, safe‑haven diversifier, keeping yields depressed for now. The yield inversion across maturities suggests the “Japanification” label will stick, at least until policy shifts alter the trajectory for investors seeking yield.