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Investing.com-- Japan’s Ministry of Finance is considering adjusting its government bond issuance plans for the current fiscal year, potentially reducing sales of super-long debt, Reuters reported Tuesday, citing sources with direct knowledge of the matter.
The review comes as yields on 20-, 30-, and 40-year Japanese government bonds have climbed to record highs, driven by waning demand from key institutional investors such as life insurers.
While the total issuance target of 172.3 trillion yen ($1.21 trillion) for the fiscal year ending March 2026 will remain intact, the ministry may shift the focus toward issuing shorter-dated debt, the report said.
Any move to reduce longer-dated bond supply could ease upward pressure on yields, which have been under scrutiny as the Bank of Japan slowly steps away from ultra-loose monetary policy.
Yields on 10-30 year government bonds fell in the range of 1% to 3% after the report.
The final decision will follow consultations with market participants, expected to take place in mid to late June, the report added.
Concurrently, Japan has lost its position as the world’s largest creditor nation for the first time in 34 years, overtaken by Germany, according to data released on May 27.
Despite Japan’s net external assets reaching a record 533.05 trillion yen in 2024, Germany’s assets surpassed this figure, aided by a stronger euro and robust current account surpluses.