Tokyo: Japan’s government plans to issue 155.1 trillion yen in government bonds in the fiscal year that begins in April, the first planned year-on-year reduction in JGB issuance since 2008, according to officials with knowledge of the process.
At the same time, the government will increase issuance of inflation-linked bonds by 1 trillion yen to 1.6 trillion yen during the 2014-2015 fiscal year and could increase that amount further if demand emerges, the sources said.
Prime Minister Shinzo Abe’s cabinet is set to meet this week to approve a budget plan for the coming fiscal year, a year after taking office with a pledge to revive Japan’s economy.
As part of the budget process, the Ministry of Finance has been finalising plans for the amount of bonds to be issued and the maturities at which the government will borrow, based in part on a projection of the market demand from large investors.
The plan calls for increasing issuance of 30-year JGBs, which have been popular with Japanese life insurers and other insitutional investors, and to curtail issuance for 2-year JGBs.