The world’s safest assets are getting too risky for Bill Gross.

The 72-year-old bond-fund manager reiterated his warning on sovereign debt after yields from the U.S. to Australia touched all-time lows in the past month. The danger of the unprecedented rally, as Gross sees it, is that any reversal will be painful for investors. Just take the bond market on Tuesday, when losses in Japan rippled across bond markets.

“Sovereign bond yields at record lows aren’t worth the risk and are therefore not top of my shopping list right now; it’s too risky," wrote Gross, who built the world’s biggest bond fund at Pacific Investment Management Co. and is now at Denver-based Janus Capital Group Inc. "Low yields mean bonds are especially vulnerable because a small increase can bring a large decline in price.”

Negative-interest-rate policies and quantitative easing from central banks in Japan and Europe have driven investors there to look abroad for returns, pushing up bond prices worldwide. After spending measures announced by Japan’s government underwhelmed investors Tuesday, a Japanese 10-year note auction drew the weakest demand in five months, with benchmark U.S. yields climbing along with those in Germany and the U.K.

Global Yields

Treasury 10-year note yields rose two basis points, or 0.02 percentage point, to 1.54 percent as of 11:50 a.m in New York, according to Bloomberg Bond Trader prices. The yield fell to a record low 1.32 percent on July 6. The price of the 1.625 percent security due in May 2026 was 100 25/32.

Similar-maturity gilt yields rose eight basis points to 0.81 percent. Japanese 10-year bond yields climbed nine basis points to minus 0.06 percent, touching the highest since March.

Investors are considering the outlook for global central-bank policies after the Bank of Japan made only minor adjustments at a meeting last week, boosting speculation it may be running out of options for further easing.

“Quantitative easing in Japan has proven not to have the effects that policy makers wanted it to have,” said Matthew Cairns, a strategist at Rabobank International in London.

“Parallels are being made in Europe now: are we looking at a similar dynamic here as to what we’ve seen for decades in Japan?”

The spillover of Japan’s recent selloff into global bond markets comes after a rout last year that erased more than $750 billion in value from sovereign debt. The retreat began in Europe in April 2015, a month after the European Central Bank started its asset-purchase program, and spread around the world. German 10-year bund yields jumped from a then-record 0.049 percent that month to as high as 1.06 percent by mid-June.