日本、補正予算で赤字国債への依存抑制へ

Japan's Finance Minister Satsuki Katayama said on May 22 that if the government compiles an extra budget, it will try not to rely as much as possible on issuing deficit-covering bonds.

The extra budget is being considered to support measures against higher energy prices and inflation caused by prolonged turmoil in the Middle East.

At a press conference, Katayama avoided commenting on the exact size of the package but indicated that a level of about 3 trillion yen mentioned in media reports was close to what was being discussed.

She also said Prime Minister Sanae Takaichi had instructed her that dialogue with markets was important while preparing measures to ease the pain of inflation.

According to Jiji Press, the government and ruling parties are envisioning subsidies to hold down summer electricity and gas bills, as well as continued support for gasoline prices.

About 500 billion yen from existing reserve funds is expected to be allocated to the electricity and gas measures, but if crude oil prices stay high, more funding is seen as likely to be needed.

In Japan, concern is seen as likely to intensify over crude oil procurement and transport if the de facto blockade of the Strait of Hormuz drags on.

Because Japan depends heavily on imports, rising fuel costs may pressure both household finances and companies.

Japan already carries a large debt burden, so there is a view that markets may become wary if the government relies too heavily on fresh borrowing.

For that reason, Katayama suggested that limiting dependence on deficit-covering bonds could help balance household support with market stability.