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Japan Cuts Super-Long Bond Issuance to Stem Record Yield Surge

Officials aim to steady investor sentiment through issuance cuts paired with a slower BoJ bond taper.

Japanese national flag hoisted atop of the Bank of Japan headquarters is seen through trees in Tokyo, Japan January 23, 2025. REUTERS/Issei Kato/File Photo
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Overview

  • The finance ministry will reduce 20-year JGB sales by ¥1.8 trillion to ¥10.2 trillion and cut 30- and 40-year offerings by ¥900 billion and ¥500 billion respectively through March 2026.
  • Total planned JGB issuance for the fiscal year will fall by ¥500 billion to ¥171.8 trillion as increased shorter-term note sales partly offset super-long reductions.
  • Starting next month, 20-year JGB auctions will see a ¥200 billion cut per sale, doubling the reduction from the draft plan.
  • The Bank of Japan will slow its tapering of bond purchases from the next fiscal year to support market stability alongside issuance cuts.
  • Officials have ruled out immediate buybacks of older super-long JGBs but have left the option open pending further discussions on feasibility and funding.