Japan Reduces Long-Term Bond Issuance Amid Yield Spike, Shifts to Short-Term Debt

Japan's finance ministry is cutting sales of 30- and 40-year government bonds by 10%, a direct response to surging yields and weak auction demand. The MOVE reduces overall issuance as policymakers attempt to stabilize a market rattled by investor retreat from long-duration debt. Monthly auctions for 20-, 30-, and 40-year JGBs will see reduced supply starting July, with combined cuts totaling 2.3 trillion yen.

Simultaneously, Tokyo is pivoting toward short-term instruments. Two-year notes and T-bills will receive 600 billion yen in additional issuance, while retail-focused principal-guaranteed bonds gain 500 billion yen. The reallocation reflects broader global debt market tensions as central banks grapple with inflationary pressures and shifting investor appetites.