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Japan To Cut Super-Long Bond Sales To Calm Markets

  • Writer: By The Financial District
    By The Financial District
  • Jun 20
  • 1 min read

Japan plans to reduce sales of super-long bonds by about 10% from its original target in a rare revision to its fiscal-year bond program, trimming overall bond issuance to ease market concerns, according to a draft document seen by Takaya Yamaguchi of Reuters.


The move follows the Bank of Japan’s recent decision to slow the tapering of bond purchases starting next fiscal year, signaling a cautious exit from its decade-long monetary stimulus program.



The move is intended to calm fears of oversupply following weak demand at recent auctions and a sharp spike in super-long yields, which reached record highs last month.

 

It also follows the Bank of Japan’s recent decision to slow the tapering of bond purchases starting next fiscal year, signaling a cautious exit from its decade-long monetary stimulus program.



The revised plan will be presented to primary dealers for discussion at a meeting on Friday. There are also proposals to buy back previously issued super-long Japanese Government Bonds (JGBs) with low interest rates, in order to better balance supply and demand.


The planned reduction in 20-, 30-, and 40-year bond sales would be partially offset by increased issuance of shorter-term notes and retail-oriented bonds specifically designed for households.








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