Japan’s Ministry of Finance is contemplating reforms to the auction process of Japanese government bonds to enhance market liquidity. This initiative aims to alleviate pressure on the supply of ultra-long-term bonds and stabilize the government bond market. The government has revised its bond issuance strategy to address waning investor interest in long-term investments. Currently, bond issuance is divided into three maturities: one to five years, five to fifteen years, and fifteen to less than twenty-nine years, with an annual issuance volume of approximately 13.5 trillion yen (around 87 billion USD). Starting next year, the Ministry plans to adjust the medium-term investment range to five to eleven years and extend the ultra-long-term range to eleven to twenty-nine years. For 2026, Japan will reduce ultra-long-term bond issuance to its lowest level in seventeen years to better manage market uncertainty and weak investor demand. Despite these measures, market volatility persists, indicating ongoing instability in investment conditions. These efforts by the Japanese government aim to promote financial stability and improve market signaling to address economic challenges, though future fluctuations in the bond market remain likely and warrant close monitoring.
Source: binance
