Japan will reduce its issuance of super-long bonds starting in July, taking a step to calm a bond market rattled by recent surges in yields.

The Finance Ministry will trim the volume of 20-, 30- and 40-year bonds sold in regular auctions by a combined ¥3.2 trillion ($21.7 billion) through the end of March 2026, according to a debt issuance plan approved Monday. The changes, which include a ¥200 billion reduction per auction in 20-year bonds and a ¥100 billion cut for longer tenors, are in line with a draft authorities showed primary dealers on Friday.

To offset the decrease in long-term funding, the ministry will increase issuance of shorter-term securities, including 2-year notes and six-month Treasury bills. The changes will be reflected from auctions next month.

The changes to issuance come after an imbalance between supply and demand for long tenors in Japan’s government bond market led to surges in yields to record highs in recent weeks. The Bank of Japan has been trimming its purchases of bonds since last summer as it seeks to shrink its footprint in the market, and life insurers haven’t stepped up purchases to fill the gap in buying.

The move by the Finance Ministry to tweak the supply-side of the market represents the first mid-year adjustment to its bond issuance plans for reasons unrelated to budgetary developments since 2009.

As a result of the plan, annual market issuance via auctions will decrease slightly to ¥171.8 trillion from the current ¥172.3 trillion, though the overall issuance volume for the fiscal year will remain unchanged in principle. The plan was finalized after the ministry’s consultations with primary dealers and investors.

The ministry’s move, which comes ahead of auctions this week, may help ease upward pressure on long-term yields. A poorly received 20-year auction last month triggered a sharp rise in super-long yields that ultimately rippled across global bond markets. The next 20-year auction is scheduled for June 24, followed by a 30-year sale on July 3.

The ministry surprised the market Friday when it proposed steeper cuts than those outlined in earlier draft documents. In the initial iteration of the plan, the ministry had proposed a uniform ¥100 billion cut to each of the three super-long maturities, aiming for a total reduction of ¥2.3 trillion in the current fiscal year.

Most investors were in favor with MOF’s proposed issuance plan while some called for continued flexibility in future issuance as needed, according to a ministry official at a briefing for reporters.

Some investors at the meeting on Monday asked the ministry to keep considering the possibility of buying back super-long bonds, the official said. An official said last week that the ministry is not currently working on carrying out buybacks.

Market participants generally welcomed the larger-than-expected reductions as a stabilizing move when the draft was released on Friday.

Still, some warn the shift in supply toward shorter maturities could create new imbalances. The revised plan also doesn’t insulate the ministry from emerging risks. The U.S. airstrike on Iranian nuclear sites over the weekend has raised geopolitical tensions, potentially pushing up oil prices and inflation, both of which could drive long-term yields higher.

Additionally, an upper house election expected to be held next month, set against a backdrop of persistent inflation, may prompt promises for increased fiscal stimulus by politicians seeking to appease discontented voters.