Japan to consider trimming super-long bond issuance, sources say

Yields on super-long Japanese government bonds fell sharply after Reuters exclusively reported that Japan’s Ministry of Finance will consider issuing fewer of these bonds. The news also pushed down the Japanese yen and U.S. Treasury yields along the way, as markets cheered Tokyo’s readiness to arrest the recent spikes in long-term interest rates to record levels due to dwindling demand from traditional buyers and global market jitters overly rising debt levels.

Why it matters

Global markets have been rattled by sharp bond sell-offs recently. In Japan, super-long bonds were also sold off as Prime Minister Shigeru Ishiba faced political pressure for tax cuts and big spending ahead of an upper house poll in July, policies that could add to the country’s already huge public debt.