INTERVIEW: Japan May Issue Bonds to Cover Extra Budget: Katayama

Tokyo, Oct. 24 (Jiji Press)–Japanese Finance Minister Satsuki Katayama said Friday that the government may issue bonds to finance a supplementary budget that will feature measures to reduce the impact of higher inflation. Katayama, who was appointed by new Prime Minister Sanae Takaichi on Tuesday, said in an interview that the government will first use higher-than-expected tax revenues and unused funds to cover an extra budget. If this is insufficient, bond issuances would be “unavoidable,” she said. The minister said that she will work to “curb the growth of debt while paying attention to the primary balance” in order to restore fiscal health. “It’s not the case that the target has been completely abandoned,” she said of the government’s target of achieving a primary budget surplus in fiscal 2025-2026. Katayama said that she will “properly give form to” an agreement between the ruling Liberal Democratic Party and its new coalition partner, Nippon Ishin no Kai (Japan Innovation Party), to abolish and reduce special tax benefits for corporations. Such a move is expected to free up funds for scrapping the provisional gasoline tax surcharge and for making education free of charge. Some have expressed worries, however, that cutting such tax incentives may dampen corporate efforts to raise wages and increase investment. “The cuts will not interfere with the policy objectives of the Takaichi administration,” Katayama said. On another LDP-Nippon Ishin agreement to reduce the consumption tax rate on food products to zero for two years, Katayama said “the agreement is highly significant” and that the government will “discuss it sincerely.” END [Copyright The Jiji Press, Ltd.]