Japan to auction record 156.6 trln yen in JGBs in FY 2013/14

TOKYO Tue Jan 29, 2013 2:33am EST

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TOKYO Jan 29 (Reuters) - Japan plans to issue a record 156.6 trillion yen ($1.73 trillion) of government bonds (JGBs) through regular auctions in the fiscal year from next April, the Ministry of Finance said on Tuesday, as the new government increases public works spending in a bid to boost economic growth.

Of that total, 112.2 trillion yen is for the rollover of maturing debt. The total also includes 42.8 trillion yen of bonds to finance spending in fiscal 2013/14.

The government will sell 2.6 trillion yen in bonds to cover a shortfall in the pension system and sell 1.9 trillion yen in bonds for the special account for reconstruction from a record earthquake and nuclear disaster nearly two years ago.

The ministry also said it will increase the frequency of 30-year debt auctions to once a month in fiscal 2013/14 from the current schedule of eight times a year to develop the market for super-long bonds.

The ministry will also auction 600 billion yen of consumer price-linked bonds next fiscal year due to interest from overseas investors, but the ministry has yet to decide the auction schedule.

Japan's government expects tax revenue to exceed income from new bond sales for the first time in four years, which would be one positive step toward improving public finances.

However, Japan's debt burden is still the worst among major economies, so investors are likely to focus on whether the government will take further steps to trim debt.

Below is the finance ministry's breakdown of debt to be sold through regular auction, by maturity and number of auctions per year.

Numbers in brackets are for fiscal 2012/13 initial budget

Amount (trln yen) Auctions/Year Total(trln yen) 40-yr 0.4 (0.4) 4* (4) 1.6 (1.6) 30-yr 0.5 4

0.6 8 6.8 (5.6)

20-yr 1.2 (1.2) 12 (12) 14.4 (14.4) 10-yr 2.4 (2.3) 12 (12) 28.8 (27.6) 5-yr 2.7 (2.5) 12 (12) 32.4 (30.0) 2-yr 2.9 (2.7) 12 (12) 34.8 (32.4) 1-yr TB 2.5 (2.5) 12 (12) 30.0 (30.0) 6-mth TB 0 (0.9) n/a 0 (0.9) Liq-enhancing 0.6 (0.6) 12 (12) 7.2 (7.2) 10-yr linker 0.6 (0.0) TBA**(0) 0.6 (0.0) ---------------------------------------------------------------- TOTAL ISSUANCE 156.6 (149.7)

* 40-year auctions are scheduled for May, August, November and February.

**The MOF will consult market participants to decide the auction schedule.

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