Japan to cut reliance on bond sales

Featured - January 28th, 2013
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Japan plans to cut its reliance on government bonds, Prime Minister Shinzo Abe said Monday in a policy speech ahead of a budget that will raise more money through taxes than bond sales.

Abe pledged he would not keep stimulus spending “forever” as the Liberal Democratic party unveiled its draft budget aimed at overhauling the trend in the last four years, when the government relied on selling bonds to raise money.

“We can’t continue fiscal spending forever,” Abe told parliament at the opening of a new session. “We will draw up and implement a growth strategy that will see private investment and consumption grow sustainably”.

“The greatest and most urgent challenge for our country is revival of the economy. We can’t exit from deflation and from a high yen by keeping the past measures,” he said.

Japan’s budget for fiscal 2013 starting April forecasts at 92.61 trillion yen ($1.05 trillion), with tax revenue estimated at 43.10 trillion yen ($474 billion) compared to bond proceeds of 42.95 trillion yen, according to AFP.

This comes following the $226.5 billion stimulus package announced by Abe’s government earlier this month, raising concerns over the level of Japan’s spiraling public debt.

Japan will increase its spending on defence by 40 billion yen amid the simmering territorial dispute with China over the Senkaku Islands in the East China Sea.