Japan’s Ministry of Finance proposes selling shorter term debt as the BOJ eyes rate hike

A draft proposal reviewed by Reuters:

• Japan must create an
  environment where government bonds remain an attractive
  investment for financial institutions, such as by issuing
  shorter-duration debt, a finance ministry panel is likely to say
• the Bank of Japan’s exit in
  March from its radical stimulus is prodding the government to
  prepare for an era of rising interest rates, which will increase
  the cost of funding the country’s huge public debt
• The BOJ also decided last week to start tapering its huge
  bond buying and reduce its holdings which, at 589 trillion yen
  ($3.7 trillion), make up roughly half of total Japanese
  government bonds (JGB) sold in the market.
  The diminishing presence of the BOJ heightens the need for
  the government to find stable buyers of JGBs and avoid a bond
  selloff that could trigger a damaging spike in yields.

Info via Reuters report.

Trying to dig up a link. The policy adjustment at the BoJ and the likely moves on JGBs from the MoF are aa seismic shift in Japan’s financial landscape.

This article was written by Eamonn Sheridan at www.forexlive.com.