Group 1 - Japan plans to reduce the issuance of ultra-long Japanese Government Bonds (JGB) by 3.2 trillion yen in the fiscal year 2025 [1]

日本计划将2025财年超长期日本国债（JGB）发行量削减3.2万亿日元。 ...

Core Viewpoint - The Japanese government plans to significantly reduce the issuance of ultra-long-term Japanese government bonds (JGB) by approximately 10% compared to the original plan, aiming to alleviate market concerns about oversupply following the Bank of Japan's (BOJ) reduction in bond purchases [1][2][3] Group 1: Government Bond Issuance Plans - The revised bond issuance plan will lower the total issuance from 172.3 trillion yen to 171.8 trillion yen, a reduction of about 500 billion yen (approximately 3.44 billion USD) [2] - The issuance of 20-year, 30-year, and 40-year ultra-long-term JGBs will be significantly cut, while short-term bills and savings-type bonds for retail investors will see a slight increase [2][5] - Specific reductions include a 900 billion yen cut for 20-year bonds to 11.1 trillion yen, a 900 billion yen cut for 30-year bonds to 8.7 trillion yen, and a 500 billion yen cut for 40-year bonds to 2.5 trillion yen [5][6] Group 2: Market Reactions and Implications - The announcement has led to a notable strengthening of the Japanese bond market, with the latest five-year JGB auction recording the highest subscription ratio in two years [7] - Short-term bonds, particularly the 2-year JGBs, have seen increased demand, with their issuance set to rise by 600 billion yen [6][7] - The market's expectation of reduced issuance of long-term bonds is viewed positively, although there are concerns about the potential decline in the government's credit quality due to increased reliance on short-term debt [7]

Group 1 - The Bank of Japan participants indicate that the liquidity in the ultra-long Japanese Government Bonds (JGB) market is continuously decreasing [1] - There is a distortion between the yields of ultra-long bonds and other maturities due to this reduced liquidity [1]