After the bursting of the Japanese real estate bubble in the 1990s, the ratio of Japanese sovereign debt to GDP soared as Japan initiated massive fiscal stimulus, including unprecedented spending for public investment in infrastructure. Surprisingly, government bond yields plummeted. In addition, both public and private institutions in Japan bought extraordinary amounts of JGBs (ten-year government bonds). As one analyst noted at the time, "For banks, insurance companies, and many other institutions including the Bank of Japan and working families themselves, their attics, basements, closets, and cabinets were stuffed with JGBs. The situation reached the point that an abrupt and sustained rise in interest rates from robust growth would have theoretically bankrupted Japan, Inc." The result led to what some analysts call Japan's "lost decades."
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