By Takaya Yamaguchi
Japan’s government is likely to increase issuance of two- and five-year bonds in a revision to its bond programme for the current fiscal year to fund its economic stimulus package, two government officials familiar with the matter told Reuters.
Under the revised plan, the government is also expected to increase issuance of treasury discount bills by around 6 trillion yen ($38 billion), the sources said.
As a result, total Japanese government bonds (JGB) scheduled sales for the year through next March would increase by around 7 trillion yen from the currently planned 171.8 trillion yen, the sources said.
It is likely to increase monthly sales of two- and five-year JGBs by 100 billion yen each from January next year, they said.
The government will make no change to the issuance amount for 10-year, 20-year, 30-year and 40-year JGBs, they said.
The focus on short-term debt likely reflects government concern over recent rises in super-long yields, as markets worry about debt oversupply from Prime Minister Sanae Takaichi’s massive spending package.
It would be the second time the government has revised its fiscal 2025 bond issuance plan following a revision in June when it cut super-long bond sales in the wake of a spike in yields of those maturities.
The revised issuance plan will be presented to primary dealers for discussions at a meeting on Thursday. It will then be submitted to cabinet for approval on Friday, along with an extra budget to fund the economic stimulus package.
($1 = 156.3300 yen)
AloJapan.com