Dividend yields and government bond yields have been inverted for the first time in 20 years, putting pressure on the upward momentum of the Japanese stock market.

The dividend yield of the Japanese stock market has fallen below the yield of the 10-year government bond for the first time in at least twenty years. This change is due to a recent sell-off in the Japanese government bond market. Currently, the dividend yield of the stocks in the TOPIX index is around 2.28%, lower than the compound yield of the government bond at 2.34%. According to data since August 2005, this is the first time such a crossover phenomenon has occurred. This shift highlights the evolution of the Japanese market landscape. As the Bank of Japan began raising interest rates and reducing bond purchases, government bond yields continued to rise. Yugo Tsuboi, Chief Strategist at Daiwa Securities, said, "This yield crossover may weaken the upside momentum of the stock market." He also pointed out that seasonal buying due to dividend demand may be more limited this year. However, the high inflation situation, coupled with increasing concerns about Japan's deteriorating fiscal situation, still provide support for stock investors. Koji Nakatsuka, Chief Investment Officer for Allianz Global Investors Japan, said, "If we consider inflation factors, the real yield of government bonds is expected to decline, while the stock market is likely to benefit from inflation-driven price increases."