Why Hong Kong has become this year’s worst-performing stock market

AI Summary

Hong Kong has become the worst-performing stock market this year amid unusual financial market conditions. Notably, Japan’s 10-year government bond yield is lower than Germany’s despite Japan's high public debt, highlighting persistent market disconnects.

There are many disconnects in financial markets. One of them is Japan’s benchmark 10-year bond yield, which currently stands at just 2.7 per cent despite the country’s large public debt burden – more than 240 per cent of economic output. Although Japanese bond yields have risen sharply in the past three years, the 10-year yield is slightly lower than that of Germany, whose government debt as a percentage of economic activity is around one-quarter the size of Japan’s. Another anomaly is the...