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NEW YORK (Reuters) – The amount of bonds carrying negative yields increased to an all-time peak of $13.2 trillion on Wednesday, up $1.6 trillion or 13.4% from a month earlier in the wake of a dramatic rally in bond markets around the world, J.P. Morgan said on Thursday.

The amount surpassed the previous record high set in July 2016 by $484 billion, J.P. Morgan analysts said.

Investors’ stampede into mainly sovereign bonds started a week ago when U.S. President Donald Trump vowed to slap a 10% tariff on $300 billion worth of Chinese imports in a bid to pressure Beijing to agree to a trade deal.

On Monday, China responded by letting its currency weaken to 7 yuan per dollar, a level not seen in a decade. Later that day, the U.S. Treasury labeled China as a currency manipulator.

The escalation of the trade conflict between the world’s biggest economies spurred bets central banks would take swift action to counter the trade risks to an already softening global economy.

Sixteen of the 21 developed countries J.P. Morgan tracks saw their government debt yields hit record lows over the past month, J.P. Morgan analysts said.

Most of the increase in negative-yielding bonds occurred in Europe. German yields across all maturities, worth $1.2 trillion, have sunk into negative territory.

Negative-yielding euro zone government bonds grew by 15.6% to $5.2 trillion with an average 28 basis-point fall in yields, they said.

More euro zone corporate bonds also crossed into negative yield territory, bringing their total to $1.7 trillion.

Meanwhile, Japanese debt with yields below zero increased by 6.6% or $458 billion to $7.4 trillion on Wednesday, J.P. Morgan said.

Reporting by Richard Leong; Editing by Susan Thomas

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