Japan’s superlong bond issuance looks set to drop, but it’s a case where less still means more than the market may be able to handle.
The government appears to be striving to calm down a market that’s wracked by rising yields and is considering decreasing sales of longer-dated debt and boosting offerings of shorter maturities.
The problem is that the elevated risk of large capital losses for the longest bonds means that the supply of those securities will have a greater risk-adjusted impact on the market.