This situation, however, was reversed after the bursting of the asset price bubble in the early 1990s, and Japan's economy experienced a decline in the trend growth path while moving in a volatile manner.
The general increase in risk aversion saw yields on bonds issued by some European sovereigns spike higher, while those for Germany, the UK and the US declined to record lows. This “flight to safety” also saw market yields on Australian government debt decline to the lowest levels since Federation. Meanwhile, many European economies saw a further contraction of economic activity. Share markets declined sharply.