Japan's 40-Year Bond Yield Nosedives As Finance Ministry Considers Cutting Super-Long Debt Issuance: Report

Yields on Japan’s super-long government bonds plunged on Tuesday after reports emerged that the Finance Ministry may reduce the issuance of these securities.

What Happened: The 30-year Japanese Government Bond (JGB) yield fell 18.5 basis points to 2.85%, from an earlier session high of 2.95%. The 20-year yield dropped 16.5 basis points to 2.34% after touching 2.44%, while the 40-year yield sank 24 basis points to 3.295%.

Japan’s Ministry of Finance will consider adjusting its bond program composition for the current fiscal year, potentially trimming super-long bond issuance, according to a Reuters report.

Why It Matters: Last week, these yields surged to record levels following a weak 20-year bond auction amid concerns over government stimulus program negotiations and expectations that the Bank of Japan would reduce bond purchases.

The moves created a divergence across the yield curve. The benchmark 10-year JGB yield fell only 4 basis points to 1.465%, while the two-year yield rose 1 basis point to 0.73%.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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