MNI BRIEF: Japan To Cut FY22 JGB Issuance To JPY215 Trillion

Japan's Ministry of Finance said on Friday said it will cut government bond issuance next fiscal year to JPY215 trillion based on strong demand for long- and longer-dated bonds and weaker demand for short-dated bonds.

For the fiscal year starting April 1, 2022, the ministry plans to increase 10-year and 40-year bond issuance but plans to cut two-year bond issuance. The MOF said that it plans to reduce government bond issuance in fiscal 2022 on a calendar basis by JPY13.6 trillion to JPY198.6 trillion.

The lower issuance comes as as the Liberal Democratic Party led by Prime Minister Fumio Kishida gears up for the biggest budget in history that includes a massive stimulus package. The budget, worth about JPY107.6 trillion, has been drafted on the assumption of record tax revenue of JPY65.2 trillion, up from JPY57.4 trillion estimated for the current year’s initial estimate.

New government bond issues will total JPY36.9 trillion, down from JPY43.6 trillion for the current fiscal year’s initial budget.