The Finance Ministry on Tuesday lowered the coupon rate for new 10-year government bonds to 0.8 percent from 0.9 percent, citing recent robust demand for the sovereign debt.
The No. 324 issue of benchmark long-term debt attracted ¥6.495 trillion in bids in an auction Tuesday, of which the ministry accepted ¥2.093 trillion. Last month, bids totaled ¥6.213 trillion and ¥2.104 trillion was accepted.
The debt will be issued Thursday and mature on June 20, 2022.
The coupon rate, or the interest rate stated on bonds when they are issued, was reduced for the first time in two months, reflecting recently falling yields on Japanese government debt as a result of investors purchasing it to seek refuge amid tensions over the sovereign debt crisis in Europe. Bond yields move inversely to prices.
The ministry also said it will set at 0.07 percent the interest rate for special government debt for individual investors to raise funds for reconstruction following the March 2011 quake and tsunami.
The fixed rate on three-year bonds to be issued in August stays at the lowest-ever level registered for the month. Buyers can purchase the debt between Thursday and July 31 at brokerages and banks.