Japan is set to sell 141.2 trillion yen ($1.2 trillion) of debt to the market in the fiscal year starting April 2017, officials involved in the plan told Reuters on Monday, meaning the volume of government issuance will decline for a fourth straight year.
The amount marks a fall of 5-6 trillion yen from the initial plan of 147 trillion yen of Japanese government bonds (JGBs) to be auctioned to the market for this fiscal year, according to the officials, who spoke on the condition of anonymity. The reduction stems from falls in issuance of fiscal investment "zaito" bonds and government bonds used to roll over the existing bonds.
The government will cut the amount of 20-year, 10-year and 2-year JGBs by 1.2 trillion yen to 12 trillion yen, 27.6 trillion yen and 26.4 trillion yen, respectively, the officials said. It will also reduce the amount of 5-year JGBs by 2.4 trillion yen to 26.4 trillion yen.
The amount of one-year treasury bills to be sold to the market will also be reduced by 1.2 trillion yen, the officials said.
The government plans to keep the current pace of issuance of 40-year JGBs in fiscal 2017/18, after having increased it for this fiscal year to take advantage of ultra-low interest rates under the Bank of Japan's aggressive monetary stimulus. In addition, the government will maintain the current pace of issuance of 30-year JGBs and inflation-linked 10-year JGBs to be sold to the market during the next fiscal year, the officials said.