Japanese long-term bonds are experiencing dumping, as the market worries that the scale of economic stimulus will increase the volume of bond issuance.

Odaily News Japan's long-term government bonds fell sharply on Monday, as market worries about fiscal conditions resurfaced ahead of the Japanese government's expected announcement of its first economic stimulus plan as early as this week. The decline in Japanese government bonds echoed the downturn in the U.S. and U.K. bond markets over the weekend. The yield on Japan's 20-year government bonds rose to a new high since 1999; the 30-year rose 5 basis points to 3.26%, and the 40-year climbed 5.5 basis points to 3.6%. Traders are focused on the actual scale of fiscal spending in Prime Minister Kishida Fumio's economic plan, as they worry that a higher debt issuance volume could threaten market stability in Japan. The GDP data released on Monday supported Kishida's push for a large-scale stimulus plan, although the Central Bank of Japan still expects to raise interest rates in the coming months. Daiwa Securities stated, “Concerns about the large-scale stimulus plan have kept investors cautious, and the impact on bond issuance remains unclear, putting selling pressure on long-term bonds.” (Jin10)