TOKYO, Dec 21 (Reuters) - Japan's Finance Ministry is planning to issue 129.4 trillion yen ($1.2 trillion) of Japanese government bonds (JGBs) to markets in the coming fiscal year, 4.8 trillion yen ($43 billion) less than in the current year, the ministry said on Friday.
That would mark the sixth consecutive year of reduced sales, owing to some improvements in Japan's fiscal balance as well as declines in the need to roll over maturing debts as the country has gradually extended its average debt maturity.
The weighted average maturity of JGBs is expected to reach nine years and two months in the fiscal year that begins in April, compared with seven years in fiscal 2011/12.
In 2019/20, the ministry plans to reduce the issuance of two-, five-, 10- and 20-year maturities, each by 100 billion yen per month from the current fiscal year, it said.
The announcement is in line with a Reuters report published on Sunday.
The MOF said the decision not to cut the issuance of 30- and 40-year JGBs reflects demand from market players.
Because short-term JGB yields are negative due to the Bank of Japan's negative interest rates policy, many domestic investors want to buy longer-dated bonds.
Despite the massive amount of debt, JGB yields have been kept low by the Bank of Japan's aggressive buying for its quantitative easing programme.
For calendar 2018, the BOJ is on course to buy almost 90 trillion yen of JGBs in gross terms.
Here are the details of the MOF's JGB issuance plan for 2019: Maturity Planned issue Frequency Annual total per auction (trln yen) -------------------------------------------------------------- 40-year 0.4 (0.4) bi-monthly 2.4 (2.4) 30-year 0.7 (0.7) monthly 8.4 (8.4) 20-year 0.9 (1.0) monthly 10.8 (12.0) 10-year 2.1 (2.2) monthly 25.2 (26.4) 5-year 1.9 (2.0) monthly 22.8 (24.0) 2-year 2.0 (2.1) monthly 24.0 (25.2) Infl-linked 0.4 (0.4) quarterly 1.6 (1.6) *Liquidity -- -- 12.6 (12.6) 1-yr TBs 1.8 (1.8) monthly 21.6 (21.6) --------------------------------------------------------------- Total 129.4 (134.2) *In liquidity enhancing auctions, the Ministry of Finance issues additional amounts of existing JGB issues to improve their market liquidity.
($1 = 111.79 yen) (Reporting by Hideyuki Sano)