No Need for Large JGB Issuance to Fund Extra Budget: Takaichi

Tokyo, May 20 (Jiji Press)–Japanese Prime Minister Sanae Takaichi said Wednesday that the country will not need to issue a large amount of Japanese government bonds to finance an envisaged supplementary budget for fiscal 2026. In a debate of party leaders held at the Diet, the country’s parliament, Takaichi, also president of the ruling Liberal Democratic Party, said that her government will consider compiling a supplementary budget for the year through next March mainly in response to turmoil in the Middle East. She suggested the possibility of dipping into budget surpluses. Takaichi apparently tried to ease concerns over rises in long-term interest rates by showing the stance of not relying on deficit-covering bonds to the bond market while demonstrating her resolve to address rising prices. Yuichiro Tamaki, leader of the opposition Democratic Party for the People, called for including subsidies for gasoline costs and electricity and gas bills in the extra budget. He said the overall size of the extra budget should be around 3 trillion yen in consideration of fiscal discipline. “(We will consider a supplementary budget) to prepare for the possibility that we can’t handle situations with reserve funds from the fiscal 2025 supplementary budget and the fiscal 2026 initial budget,” Takaichi said. She declined to comment on the content and size of the envisaged supplementary budget. The prime minister refuted the argument by Junya Ogawa, leader of the major opposition Centrist Reform Alliance, that she had been slow to order the compilation of the extra budget, saying, “I don’t believe my instruction was late.” Takaichi added that she had fully considered the possibility of compiling an extra budget in case the Middle East crisis is prolonged. “I want to protect people’s livelihoods and corporate activities while curbing the issuance of deficit-financing bonds as much as possible,” the prime minister said. On a planned consumption tax cut to zero for food items for two years, Takaichi indicated that the government will submit related bills to the Diet immediately after the National Council on Social Security, a suprapartisan panel, releases its planned interim report before summer. It was the first party leaders’ debate in the ongoing Diet session. Takaichi faced six opposition party leaders, the most ever under the debate format. The other four opposition leaders who joined the debate were Shunichi Mizuoka of the Constitutional Democratic Party of Japan, Sohei Kamiya of Sanseito, Toshiko Takeya of Komeito and Takahiro Anno of Team Mirai. END [Copyright The Jiji Press, Ltd.]