U.S. Treasury to at least double long-term Treasury buyback limit

2026-08-19

Supporting liquidity in the long-term bond market

The U.S. Treasury said on the 19th that it would raise the limit on buybacks of Treasuries with 10 years or more to maturity by at least twofold. The move is aimed at improving liquidity in the Treasury market and curbing the risk of sharp swings in interest rates.

Buyback limit raised to $4 billion

The main purpose of the buybacks is to support the functioning of the overall U.S. Treasury market by repurchasing older issues whose liquidity has declined over time since issuance. The Treasury has conducted the operations once a month for two segments: 10- to 20-year bonds and 20- to 30-year bonds. The limit per operation had been $2 billion (about 317 billion yen), but from Sept. 9 to Nov. 4, the limit for each segment will be increased to at least $4 billion.

Long-term yields and yen respond

Following the announcement, yields on long-term and super-long-term bonds in the U.S. bond market fell sharply, while bond prices surged. The 30-year Treasury yield briefly reached 5.18%, down about 0.09 percentage point from before the announcement. The 30-year yield had just reached its highest level in about 19 years on the 18th. As U.S. interest rates fell, the yen also surged against the dollar, briefly strengthening to the low 158-yen range per dollar, an appreciation of nearly 1 yen from immediately before the announcement.

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