Japan mulls less government bond sales FY2017 for a 4th year

TOKYO: Japan is considering selling some 141 trillion yen ($1.19 trillion) of debt on the domestic market for the next fiscal year from April, effectively lowering bond issuance for a fourth straight year, government sources involved in the debt issuance plan told Reuters.

The amount marks a fall of 5-6 trillion yen from this fiscal year's plan to auction 147 trillion yen of Japanese government bonds (JGBs) to the market, the sources said on condition of anonymity because they are not authorised to speak to media.

It will be the lowest bond sales to the market on an initially-planned basis since the 2009 global financial crisis.

Less borrowing means Japan's debt pile will grow at a slower pace, a positive development for Prime Minister Shinzo Abe's aim of achieving both fiscal consolidation and economic growth.

The government estimates that the outstanding amount of JGBs will top 930 trillion yen by March 2017, with public debt more than twice the size of its economy.

The reduction stems from falls in issuance of government bonds used to roll over the existing bonds.

The government plans to keep the current pace of issuance of 40-year JGBs in fiscal 2017/18, after having increased it for this fiscal year to finance the construction of maglev lines, which has been brought forward as part of an economic stimulus programme.