Note

Sources: Japan to boost sales of 40-year debt, decrease overall JGB issuance next year – Reuters

· Views 34

“Japan plans to issue 4.2 trillion yen ($37 billion) of 40-year government bonds in the new fiscal year, a 17% increase that comes even as the government plans to cut its bond issuance overall,” said Reuters, quoting anonymous sources, during early Thursday morning in Asia.

Key quotes

It marks a third straight year of increases in issuance of the 40-year bonds, which are closely watched by the market, and reflects solid demand from life insurers at the long end of the yield curve, said the sources.

Prime Minister Fumio Kishida's inaugural debt issuance plan will see overall calendar-based sales of Japanese Government Bonds (JGBs) at around 200 trillion yen, or down about 20 trillion yen from this year, the sources said, reflecting the new premier's push to keep a lid on debt.

The increase in the 40-year bonds would mean sales of around 700 billion yen at auctions every other month, from auctions of 600 billion yen now, the sources said.

The government will keep issuance steady of five-year, 20-year, 30-year and inflation-linked 10-year bonds, the sources said.

The government also plans to boost liquidity-enhancing auctions by 600 billion yen in the next fiscal year, the sources said. In liquidity enhancing auctions, the Ministry of Finance issues additional amounts of existing JGBs to improve liquidity.

Market reaction

The news favored USD/JPY prices to pick up from intraday low to 114.13. However, bulls await Tokyo open amid recent challenges to the previous risk-on mood, raised by the White House.

Read: White House warns Pfizer Covid-19 pill will not be widely available for months – FT

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.
avatar

Hot

No comment on record. Start new comment.