Japan ponders JGB restructuring amid super-long bond slump
The Finance Ministry is considering ways to deal with a slump in Japan's super-long bonds, or those with maturities of more than 10 years. It's planning a meeting of financial institutions this month to discuss a possible review of their maturities.
The yields on super-long bonds have been surging recently. The yield on the 30-year debt temporarily rose to a record 3.185 percent on May 21.
The 40-year yield soared to an all-time high of 3.675 percent the following day.
When long-term government bonds are sold, their prices drop and yields go up.
The May 20 auction for 20-year bonds saw the weakest demand since 2012. A separate sale of 40-year bonds last Wednesday drew the lowest bid-to-cover ratio since July 2024.
The ministry is studying whether to trim issuance of super-long bonds and focus more on shorter-term debt.
Market sources say investors are paying greater attention to fiscal policies as US President Donald Trump aims to reduce taxes.
They are also looking at Japan's fiscal condition, since debate over a consumption tax cut between the ruling and the opposition parties in the Diet is heating up.
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Japan Times
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Japan Times
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