Japan to issue nearly US$60 billion in bonds to fund economic package

JAPAN is set to issue close to US$60 billion in bonds in its second extra Budget to fund a planned 13.2-trillion-yen (S$118.7 billion) economic package to ease the pain of rising living costs, a draft seen by Reuters showed on Wednesday (Nov 8).

The additional issuance would bring total Japanese government bond (JGB) issuance for this fiscal year to around 44.5 trillion yen, the draft showed.

The spending plan, which includes temporary income tax cuts, has raised worries that it could further strain Japan’s fiscal position, and possibly derail the government’s aim of balancing its primary Budget by the year ending in March 2026.

It would bring the debt-dependency ratio of the annual Budget to nearly 35 per cent, the draft showed.

Government officials were not immediately available for comment.

Fiscal reform is an urgent task of Prime Minister Fumio Kishida’s government, which is saddled with the industrial world’s heaviest public debt at more than twice the size of the economy, the world’s third-largest.

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Several rounds of huge extra Budget spending in recent years have aggravated Japan’s already dire public finances. REUTERS