Japan govt to lower JGB sales for third straight year: draft

JAPAN’S government is set to reduce scheduled sales of Japanese government bonds (JGBs) by 11.3 per cent to 171 trillion yen (S$1.6 trillion) next fiscal year from the current year, according to a draft plan.

Much of the reduction in scheduled JGB sales to the market will be made in shorter-dated debt – one year treasury discount bills, two-year and five-year bonds – amid speculation the Bank of Japan may roll back its negative interest rates policy. It would mark a third straight year of reductions in scheduled JGB sales to the market, after having peaked at 221.4 trillion yen in fiscal 2021/22. JGB sales to the market have been set initially at 190.3 trillion yen for this fiscal year.

Japanese finance ministry officials were not immediately available for comment.

Sales of two-year debt and one-year treasury discount bills for fiscal 2024/25 would be 3.6 trillion yen lower than this year at 31.2 trillion yen and 38.4 trillion yen, respectively.

Five-year JGBs would also be reduced by 2.4 trillion yen to 27.6 billion yen in the next fiscal year, the draft, which was reviewed by Reuters, showed. Super-long bonds, with maturities of 30 and 40 years, remained unchanged, it showed.

Benchmark 10-year JGBs and 20-year bonds would be cut, while liquidity enhancement bills would be increased. Climate transition bonds worth 1.4 trillion yen will be sold to the market in fiscal 2024/25 to promote decarbonisation. REUTERS