Japan's Finance Minister plans to cut gov't bond sales as national debt hits record levels

09:00, May 12, 2010      

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Japanese Finance Minister Naoto Kan said Tuesday the government will strictly control fiscal 2011 bond sales amid growing concerns about sovereign debt stemming from Greece's financial crisis and in a bid to contain Japan's record national debt.

Speaking at a news conference in Tokyo, Kan said the government will issue 33.3 trillion yen (360 billion U.S. dollars) worth of bonds for the current fiscal year through March 2011, below this year's issuance of 44 trillion yen (473 billion U.S. dollars).

"Given sovereign risks, we should do our best to avoid an increase in new bond sales next fiscal year as much as possible," said Kan.

"We'll make every effort not to surpass 44.3 trillion yen (478. 92 billion U.S. dollars) in order to protect people's standard of living," he said.

While agreeing with Kan's fundamental idea of maintaining fiscal discipline, Prime Minister Yukio Hatoyama, who promised to cap annual new bond sales at about 44 trillion yen after taking office last September, said Kan's aims were not official government policy.

"The government's basic stance of trying to maintain fiscal discipline remains unchanged," Hatoyama told reporters Tuesday evening.

"It's not that I don't understand Minister Kan's feelings, but we haven't even started deliberations on a budget for the next year and it is not a policy the government has decided on," the premier said, adding that Greece's problems differ from Japan's as the majority of Greece's debt is held oversees whereas Japan's reliance on foreign investors is far less.

Japan's finance ministry reported Monday that the outstanding balance of government debt hit a record 882.92 trillion yen (9.54 trillion U.S. dollars) at the end of fiscal 2009, which ended March 31, a rise of 4.3 percent from a year earlier and gross public-sector debt is approaching 200 percent of the nation's gross domestic product, the worst among the world's developed economies.

National Strategy Minister Yoshito Sengoku said today that the government must urgently formalize its fiscal rehabilitation plan which is due to be enacted next month.

Quoting an anonymous source speaking last month, Bloomberg reported Tuesday the government is considering targeting a budget surplus or a reduction in the deficit to 3 percent of gross domestic product by 2020 from a 9.4 percent shortfall this year.

Speaking about Greece's situation, Kan noted that a loss of international faith in a country's markets has a detrimental impact on people's lives that stems far beyond just signaling national fiscal instability and as such emergency measures are necessary to restore confidence.

"It is positive that the situation is regaining stability with certain agreements," Kan said adding that this week's agreement in Europe to stem the region's fiscal woes has helped to calm global financial markets and restore investor confidence around the world.

Source:Xinhua

(Editor:黄蓓蓓)

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