Anyone still hoping the global economy will have a decent 2019 isn’t paying attention to Japan’s bond market. Tokyo’s debt, after all, is very much in the news these days. It just reached a record high of 1,100 trillion yen, or about US$10 trillion. That equates to roughly $79,000 for each of Japan’s 127 million residents. And yet investors can’t seem to get enough of the stuff.

Japan’s negative-yielding government bonds have been a surprising, if counter-intuitive, hit. That is particularly true of overseas punters, which officials at Sumitomo Mitsui Trust Asset Management expect to continue gorging on yen-denominated public debt. And that’s just fine by Bank of Japan governor Haruhiko Kuroda, who is now under a bit less pressure to ease.

Yet Japan’s safe-haven halo speaks to the upside-down nature of today’s global economy.

Tokyo has the developed world’s largest public debt load, deflation, a shrinking population and the same Moody’s credit rating as Estonia. It has the most interventionist central bank among major economies. Japan also is very much in harm’s way if North Korea decides to do more than just test a missile.

And so, the rally in Japanese government bonds is very much a cautionary tale about the months ahead.

An auction of 10-year government debt this month attracted the strongest bids in 13 years. Two days later, a 30-year debt sale was oversubscribed amid optimism about the US Federal Reserve’s dovish pivot. Demand has been so brisk, in fact, that Kuroda’s team is pushing back. On Tuesday, the BOJ reduced purchases of bonds for the first time in two months.

Consider it a line in the proverbial sand. Even if downward pressure on yields relieves the BOJ of the need to support a flagging economy, it doesn’t want to lose control of the so-called yield curve. The negligible spread between short- and long-dated Japan government bonds has devastated bank profits, particularly those serving rural customer bases. Though the BOJ recalibrates asset purchases from time to time, the nation’s bankers are aggrieved.

One side effect: Dwindling profits make Japan’s roughly 100 regional institutions less included to lend. That starves the BOJ of the multiplier effect that makes monetary policy so potent.

Yet finding an exit from the zero-interest-rate policy has proved all but impossible. This week, it’s worth noting, marks the 20th anniversary of a policy experiment that both the Fed and central banks around the globe would emulate. Try as he may, though, Kuroda is no closer to ending ZIRP than his three predecessors.

Among the reasons Kuroda is trapped: “yen-carry trade” risk. Global investors are drawn to Tokyo’s liquid markets, current-account surpluses and ultra-low borrowing options. For 20 years, this latter phenomenon has been the wind beneath the wings of higher-yielding assets from Brazil to New Zealand. There’s a catch, though: Sudden yen rallies can send shockwaves through global markets as those bets are unwound and repatriated.

Now that the Fed is taking a breather on rate hikes, many are betting on a stronger yen. It’s the last thing Japan’s export-led economy needs. As 2019 unfolds, Japan faces intensifying headwinds. US President Donald Trump’s trade war is crimping exports, slamming plans for fixed-asset investment and imperiling the wage gains needed to defeat deflation once and for all. This, too, is a year in which Prime Minister Shinzo Abe plans to raise sales taxes again – this time to 10% from 8%.

The four tightening moves Fed governor Jerome Powell pulled off in 2018 seem a distant memory now. The sense among many punters is that Powell bowed to threats from Trump. Perhaps. But the pause in rate hikes has reduced concerns about widening rate gaps between Japan and other Group of Seven peers.

That is creating a bid for ultra-low yielding Japanese government bonds, one that speaks volumes about a decidedly upside-down moment in global finance.