TOKYO (MNI) – Japan’s Ministry of Finance said Saturday that it
plans to sell Y149.7 trillion worth of government bonds in the market in
the fiscal year beginning April 1, 2012, higher than the Y144.9 trillion
initially slated for the current fiscal year.

The so-called calendar base debt sales, or the amount of government
bonds that the finance ministry sells directly to the market through
auctions, would increase for a fourth consecutive year.

Apart from JGBs to be sold to refinance maturing bonds, the MOF
will sell Y44.244 trillion of new bonds to fund the government’s fiscal
2012 budget, down from this year’s initial plan (which does not account
for supplemental budgets) of Y44.298 trillion, the ministry said.

The fiscal framework endorsed by the cabinet has called for capping
general-account spending, excluding debt-servicing costs, at Y71
trillion and limiting annual new-bond issuances to around Y44 trillion
in the fiscal 2011-13 budgets.

By the end of March 2013, the level of outstanding JGBs will total
Y709 trillion, 148% of projected gross domestic product, while its total
outstanding long-term debt, including JGBs and municipal bonds, is
expected to total Y937 trillion, 195% of projected GDP, the ministry
said.

As a result, Japan will remain the most heavily indebted
industrialized nation.

Meantime, total JGB issuance, which includes sales to the market,
retail sales to individuals, and sales to the public sector, will reach
Y174.2 trillion, up from an initial plan of Y169.6 trillion this year.

Next fiscal year, the government will sell a total of Y1.6 trillion
in 40-year debt next year, unchanged from this year, and Y5.6 trillion
in 30-year debt, also unchanged.

The MOF will sell Y27.6 trillion of 10-year bonds via periodic
auctions, Y30.0 trillion in five-year notes, Y32.4 trillion in 2-year
notes in fiscal 2012, all up from the initially planned issuance levels
for this fiscal year.

The ministry will also sell 14.4 trillion in 20-year bonds, up from
13.2 trillion for the initial FY 2011 plan.

The ministry plans to auction liquidity bonds worth Y7.2 trillion
next fiscal year, unchanged from the current year. These auctions, known
as “liquidity-providing tenders,” are aimed at providing the market with
additional bonds to cope with specific shortages.

Following is a list of JGB issues for fiscal 2012 to be absorbed by
the market, according to the MOF’s draft budget.

Total 40-year bonds: Y1.6 trillion
30-year bonds: Y5.6 trillion
20-year bonds: Y14.4 trillion
10-year bonds: Y27.6 10-year
5-year bonds: Y30.0 trillion
2-year bonds: Y32.4 trillion
Short-term bills: Y30 trillion
Liquidity injection auctions: Y7.2 trillion
Total: Y149.7 trillion

Non-price auction: Y4.2 trillion
Individual investor bonds: Y2.5 trillion

Following is a list of the size of sales per auction during the
fiscal 2012 and the number of auctions in parentheses.

Per Offer Number Amount 40-year bonds: Y400 billion (4)
30-year bonds: Y700 billion (8)
20-year bonds: Y1.2 trillion (12)
10-year bonds: Y2.3 trillion (12)
5-year bonds: Y2.5 trillion (12)
2-year bonds: Y2.7 trillion (12)
Liquidity injection: Y600 billion (12)
One-year T-bills: Y2.5 trillion (12)

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