Japan's extra budget won't add deficit-covering bonds, Takaichi says
Japanese Prime Minister Takaichi said the planned extra budget will not include new deficit-covering bonds. The remark was read as a fiscal-discipline signal given the country's high public debt. The budget's size and items will become clearer in the period ahead.
According to Nikkei Asia, Japanese Prime Minister Takaichi said the planned extra budget will not include new bonds to cover deficits. The remark was treated as a message of fiscal discipline in a country with one of the highest public-debt ratios among advanced economies.
Extra budgets in Japan are typically used for stimulus packages and unexpected spending. The prime minister's statement that financing will be arranged without issuing new deficit bonds strengthened expectations that outlays will be met from existing revenue and resources.
The size of the extra budget, which items it will fund, and how the Iran war's effect on energy costs will be reflected are set to become clearer in the period ahead. Markets continue to watch the statement for its impact on bond yields and the yen.
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