LDP's Nakanishi Proposes 'Order-of-Magnitude' Expansion of Retail Government Bonds
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Kenji Nakanishi, a lawmaker from the Liberal Democratic Party, said on the 6th that retail sales as a share of total government bond issuance need to be expanded by an 'order of magnitude.' He stressed the idea of making them a pillar of bond absorption through a review of product design, including tax incentives, and told Reuters in an interview that 'there is room for people to buy more.' The Ministry of Finance announced on the 6th that retail government bonds for October issuance, comprising 10-year floating-rate, 5-year fixed-rate, and 3-year fixed-rate notes, totaled 1.0251 trillion yen, bringing the fiscal-year cumulative total to 6.1641 trillion yen, already exceeding the initial plan of 5.9 trillion yen and on pace to surpass the record 7.2712 trillion yen set in fiscal 2025. As the Bank of Japan reduces its government bond purchases, how to capture household financial assets exceeding 2,000 trillion yen will be a litmus test for future fiscal management, and while retail government bonds are selling well amid rising interest rates, their holding ratio remains low. Nakanishi said that with the steepening of the yield curve, super-long bond yields are 'becoming an attractive level,' and that products with maturities longer than 10 years would also be 'good to have.'