Japan plans to trim its overall government bond issuance to the market by 0.5% fiscal year from current year's levels, government officials said, as Prime Minister Shinzo Abe balances supporting growth and reining in huge public debt.
The drop would mark the seventh straight year of declines in total debt issuance, despite rising fiscal spending as worries grow that cooling global growth and the US-China trade war could hit corporate tax income in export-led Japan.
The government is set to sell 128.8 trillion yen ($1.19 trillion) of Japanese government bonds (JGBs) in the next fiscal year beginning in April 2020, down from this year's 129.4 trillion yen, the two officials told Reuters on condition of anonymity because the plan has not yet been announced.
Of the total, the government is considering increasing issuance of JGBs with maturity of 40 years by 600 billion yen from the current fiscal year to 3 trillion yen, the officials said, in a nod to solid demand from investors hunting for yield amid years of ultra-low interest rates.
Issuance plans for other maturities will remain unchanged, they added.
New bond issuance for next fiscal year, which excludes bonds issued to roll over those reaching maturity, will fall for the 10th straight year to 32.56 trillion yen, versus this fiscal year's 32.7 trillion yen, a draft obtained by Reuters showed. The government is expected to approve its draft budget for next fiscal year on Friday.
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