According to a plan approved by the Japanese Cabinet on Friday, the scale of ultra-long-term government bonds planned to be issued by the Ministry of Finance next fiscal year will be the lowest in 17 years. Compared to the previous fiscal year, Japan will reduce the issuance of ultra-long-term government bonds by nearly one-fifth, down to approximately 17.4 trillion yen (about $11,160 million), reflecting the new government's sensitivity to the recent record highs in Japanese government bond yields over the past few weeks.

The market expects that Prime Minister Sanae Takaichi's expansionary fiscal policy will further exacerbate Japan's already heavy debt burden, pushing Japanese government bond yields higher. The total issuance of Japanese government bonds, including ultra-long-term bonds, for the next fiscal year will amount to 180.7 trillion yen, a decrease of nearly 5% compared to the total amount issued in the current fiscal year, which includes the supplementary budget. The Ministry of Finance has not increased the issuance of 10-year government bonds, but has raised the total issuance of 2-year and 5-year government bonds by 2.4 trillion yen.