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Draft Shows Japan Plans to Reduce Sales of Ultra-Long-Term Government Bonds
Summary: According to draft documents, Japan plans to reduce the scheduled sale of government bonds in the 2025/2026 fiscal year by 500 billion yen to 171.8 trillion yen, compared to the initial planned total; the sales of 20-year and 30-year government bonds will be reduced by 900 billion yen each, to 11.1 trillion yen and 8.7 ...
According to draft documents, Japan plans to reduce the scheduled sale of government bonds in the 2025/2026 fiscal year by 500 billion yen to 171.8 trillion yen, compared to the initial planned total; the sales of 20-year and 30-year government bonds will be reduced by 900 billion yen each, to 11.1 trillion yen and 8.7 trillion yen, respectively; Japan will increase the issuance of two-year government bonds, one-year and six-month discount treasury bills, each by 600 billion yen; and will increase the issuance of 500 billion yen government bonds to households, bringing the total to 5.1 trillion yen.
The revised issuance plan will be submitted to primary dealers for discussion at a meeting on Friday. This move aims to alleviate concerns about market imbalance between supply and demand, as recent auction demand has been weak, leading to a surge in ultra-long bond yields to historic highs last month. Additionally, there are some ideas to repurchase some previously issued ultra-long-term Japanese government bonds at low interest rates to improve supply and demand balance.
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Link: Draft Shows Japan Plans to Reduce Sales of Ultra-Long-Term Government Bonds [Copy]
