The yield on Japan's 10-year government bond dropped below zero today, in a first for a G7 country as panicked investors flee a bloodbath on equity markets. 

The note's effective return slipped to -0.005%, continuing a downtrend sparked by the Bank of Japan's surprise move last month to slap a negative interest rate on some commercial lenders' deposits. 

Before the unexpected decision, Japan's 10-year bond was paying a yield of about 0.2%, similar to the current payout on a comparable German government bond. 

By comparison, the US pays about 1.7% on a 10-year bond while hard-hit Greece must pay a near 10% yield on its decade-long notes to attract wary investors. 

The decline in the yield - effectively the rate of return for a bond if held to maturity - reflects rising demand for Japanese government debt, and investors' worries about putting more money into equities. 

Bonds, and especially government bonds, are generally seen as super safe investments where capital is all-but guaranteed, even if they pay very little - or no - interest.

Stocks and commodities have got off to a terrible start in 2016, reflecting the increasingly gloomy outlook from policymakers - particularly for the world's second biggest economy and key driver of world growth, China.

Tokyo shares tumbled more than 5% in Asian trade, extending a global sell-off as a stronger yen dented exporters and after oil prices tanked again on fears of a worldwide economic slowdown.