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MNI POLICY: Japan To Cut FY21 JGB Issue By JPY27.1 Trln

Japan MOF To Lift FY21 Issuance Of 40-Year JGBs By JPY600 Bln To JPY3.6 Trln

TOKYO (MNI)

Japan's Ministry of Finance will cut the total amount of government bond issues next fiscal year but increase longer-term bonds at the expense of short-term ones in response to demand.

The MOF said Monday that it plans to issue government bonds worth JPY236.0 trillion in the fiscal year starting April 1, down by JPY27.1 trillion from this year's JPY263.1 trillion.

New government bond issues will total JPY43.6 trillion, down from JPY112.6 trillion in the current fiscal year after the third supplementary budget.

The MOF plans to cut six-month short-term bond issues by JPY4.4 trillion and increase 40-year-bond issues by JPY600 billion to JPY3.6 trillion as investor demand for super long-term bonds remains solid.

LOW YIELDS

The amount of the JGBs to be sold to institutional investors through auctions in a calendar year will increase by JPY9.1 trillion to a record high of JPY221.4 trillion.

The MOF has taken advantage of continued low bond yields caused by the Bank of Japan's aggressive monetary easing, which has temporarily pushed some yields into negative territory.

Under next year's budget, the government will issue 40-year debt totalling JPY3.6 trillion on a calendar year basis, up JPY600 billion from the current year.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com