JAPAN plans to issue more long-dated bonds in the next fiscal year from April, trying to lock in low long-term borrowing costs at a time when bonds yields are depressed at historic lows due to the Bank of Japan’s aggressive buying.

    The Ministry of Finance (MOF) announced yesterday it will increase the issuance of 30-year and 40-year Japanese government bonds (JGBs) in fiscal 2015/16 even as higher tax revenue lets the ministry reduce total debt sales.

    In the budget for the fiscal 2015/16 Prime Minister Shinzo Abe’s cabinet approved yesterday, the ministry slightly reduced new JGB issuance, or borrowing to finance spending in the year that will start April 1, by 4.4 trillion yen (US$37.1 billion) from the initial budget for this fiscal year.

    Based on that budget and other factors including rollover of maturing debt of almost US$1 trillion, the MOF plans to auction 152.6 trillion yen of bonds in the next fiscal year, down from 155.1 trillion yen in the current year under the initial plan.

    That would make the coming fiscal year the second in a row in which the ministry has managed to reduce debt sales through auction.

    The ministry, however, plans to increase 30-year debt sales by 1.6 trillion yen and 40-year JGB issuance by 0.4 trillion yen, while reducing its offering of two- and five-year bonds.

    As a result, the average maturity of JGBs is expected to rise to eight years and five months by March 2016 from around eight years in March 2015, the finance ministry said.(SD-Agencies)