TSX runs higher on rate cut expectations
Investing.com-- Japan’s government is planning a rare mid-year revision to its bond issuance program, slashing super-long bond sales by about 10% to address market concerns over deteriorating demand and soaring yields, Reuters reported on Wednesday, citing a draft document.
The move will reduce total Japanese government bond (JGB) sales for the fiscal year ending March 2026 by 500 billion yen ($3.44 billion) to 171.8 trillion yen, with sharp cuts in 20-, 30-, and 40-year debt issuance, the report stated.
The Reuters report said sales of each of these maturities will be trimmed by 100 billion yen at every auction starting next month.
Japan 10-Year bond yield fell 1% as of 04:14 GMT.
The decision follows recent turbulence in the bond market, where super-long JGB yields surged to record highs amid weak auction demand.
It also aligns with the Bank of Japan’s signal earlier this week to slow its tapering of bond purchases, reflecting a broader preference for caution in exiting its ultra-loose monetary regime.
To offset the reduction, the government will boost short-term issuance, including two-year debt and treasury bills, by 600 billion yen each. Principal-guaranteed bonds for retail investors will also rise by 500 billion yen, the report said
Japan may also consider buying back older, low-rate super-long JGBs to help restore market balance, the report added.