Expectations in the market are intensifying that the government may adjust debt issuance as soon as next month by increasing sales of shorter maturity securities and trimming offerings of longer-dated ones.
Japan’s yields are hovering at historical highs after a series of auctions in recent weeks that saw poor demand. Thursday’s 30-year bond sale saw its weakest demand ratio since 2023 but yields fell as markets began pricing in expectations the Finance Ministry may cut issuance to cap the recent surge in longer-term debt yields.
"The forward-looking attitude that the Finance Ministry is moving toward reducing issuance helped out the auction results and led to the buying of bonds,” said Takashi Fujiwara, chief fund manager at Resona Asset Management in Tokyo. "But if the Finance Ministry’s issuance reduction is disappointing, selling pressure may increase again from July.”
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.