Japan's finance ministry said on Wednesday it proposed cutting the issuance of long-dated government bonds in liquidity enhancement auctions in an apparent effort to soothe market concerns.
Japanese government bonds (JGB) have been under pressure in recent months due to global concerns over widening government deficits, domestic political uncertainty and declining bond purchases by the Bank of Japan.
The proposal, presented to primary dealers, or financial institutions that act as market makers, calls for reducing the issuance of off-the-run bonds with remaining maturities between 15.5 years and 39 years to 250 billion yen ($1.69 billion) from 350 billion yen now per auction.
Last month, the finance ministry canvassed opinions from primary dealers offering two options for those bonds, either to cut the auction issuance amount to 250 billion yen or eliminate it entirely.
($1 = 148.0200 yen)
