Japan's Ministry of Finance said Friday that...>

JGBS: Japan's Ministry of Finance said Friday that it plans to sell Y149.9

trillion of government bonds in fiscal 2018 starting on April 1, down Y4.1

trillion from an initial Y154.0 trillion for the current fiscal year.The drop in

bond issuance in fiscal 2018, the fourth straight year, is due to a decline in

refinancing bond issuance, thanks to super-low bond yields. The expected bond

issuance in fiscal 2018 worth Y149.9 trillion is the lowest level since fiscal

2008, when the MOF issued Y135.7 trillion.

- The MOF will reduce the issuance of 1-year Treasury discount bills as well as

2-, 5-, 10-. 30- and 40-year government bonds.

- Reduction of issuance of longer-end bonds is to maintain market stability over

the long term and in response to changing demand which has waned due to low

returns. The cut in the 40-year sector will be the first time ever and the cut

of 30-year will be the first since fiscal 2001. BoJ JGB purchases under their

QEE programme are tightening liquidity conditions. At the end of September, the

BOJ held about 40.9% of Japan's debt outstanding that has topped Y1 quadrillion

(Y1,087 trillion), double of its GDP.