TOKYO: Japan plans to use so-called bridging bonds to help finance Prime Minister Sanae Takaichi’s investment plans, the government’s top spokesperson says, a development that comes as investors are already concerned about more debt issuance.
“Japan has implemented multi-year budget measures through the issuance of bridging bonds backed by funding sources,” chief cabinet secretary Minoru Kihara told reporters yesterday, citing previous examples used to help fund corporate efforts to adopt green technologies.
“We will further expand such initiatives and work toward realising a stronger economy,” he said.
Bridging bonds are designed to cover temporary funding shortfalls on the premise that future funding resources can be secured. The Finance Ministry classifies them differently from deficit-covering bonds, and other recent examples have included special bonds issued to fund childcare programmes.
The proposal comes as concerns over Japan’s fiscal outlook continue to simmer in the bond market.
Japan’s 10-year government bond yield briefly climbed earlier this month to the highest level since 1996 amid worries over the Takaichi administration’s pro-spending fiscal stance. — Bloomberg
