Japan’s government has unveiled a more aggressive plan to scale back sales of super-long government bonds, responding to recent surges in yields that alarmed markets. According to a revised issuance program released by the Finance Ministry, sales of 20-, 30-, and 40-year Japanese government bonds (JGBs) will be reduced by a total of ¥3.2 trillion ($22 billion) through March 2026 - significantly more than the ¥2.3 trillion previously anticipated.
The changes include:
20-year bonds: cut by ¥1.8 trillion to ¥10.2 trillion
30-year bonds: cut by ¥0.9 trillion to ¥8.7 trillion
40-year bonds: cut by ¥0.5 trillion to ¥2.5 trillion
Starting next month, auctions for 20-year JGBs will see ¥200 billion reductions per sale—double the reduction previously planned.
The overall bond issuance for the fiscal year will decrease slightly by ¥500 billion to ¥171.8 trillion, as cuts to long-term debt are partially offset by higher issuance of shorter-term instruments:
2-year bonds: up ¥0.6 trillion
1-year bonds: up ¥0.3 trillion
6-month Treasury bills: up ¥1.8 trillion
The move follows weak auction demand and record-high yields on 30- and 40-year bonds last month, fueling broader concerns about Japan’s fiscal outlook. Coupled with the Bank of Japan's slower bond-buying taper, the plan aims to calm markets and ease pressure on long-term yields.