Japan plans to reduce the issuance of ultra-long-term government bonds starting in July.

A draft of the bond issuance plan adjustment shows that the Japanese Ministry of Finance is considering reducing the issuance size of super long-term government bonds starting in July. According to the draft, the Ministry of Finance plans to reduce the issuance amount of 20-year, 30-year, and 40-year government bonds by 100 billion yen each before the end of March 2026. To make up for this decrease, the Ministry of Finance is considering increasing the issuance amount of 2-year government bonds and other short-term government bonds. According to the proposed adjustment to the issuance plan, the total issuance amount of 40-year government bonds for this fiscal year will be reduced by 500 billion yen to 25 trillion yen, and the total issuance amounts of 30-year and 20-year government bonds are expected to decrease by 900 billion yen each. The total issuance amounts of 5-year and 10-year government bonds will remain unchanged. With the Bank of Japan reducing bond purchases and concerns growing about Japan's long-term fiscal health, yields on Japanese super long-term government bonds soared earlier this year. This caused a chain reaction globally, leading the market to speculate that the Japanese Ministry of Finance will take action to stabilize market fluctuations.