TOKYO (Reuters) - Japan will reduce new government bond issuance for the third straight year in next fiscal year’s budget as an economic recovery boosts corporate tax revenues, media reports said on Wednesday.
A decrease in new bond issuance will underscore Prime Minister Shinzo Abe’s resolve to continue efforts to restore Japan’s finances, even after his decision to postpone next year’s planned sales tax hike by 18 months.
The government is seen selling around 40 trillion yen ($342 billion) in new bonds in the next fiscal year beginning in April 2015, down from 41.3 trillion yen for the current year, the Asahi newspaper said.
Tax revenues are set to rise to around 54-55 trillion yen from current year’s 50 trillion yen as the weak local currency, rising stock prices and improvements in the economy boost tax payments from companies and households, it said.
But Japan is unlikely to make much headway in fixing its tattered finances as total government spending is seen hitting a record high of around 98 trillion yen due largely to soaring social welfare and medical costs for a rapidly ageing population, the Nikkei economic daily said.
The government will finalize next fiscal year’s budget on Jan. 14 and aim to pass it through parliament by the March end of the current fiscal year, the Nikkei said.
The government usually compiles the state budget for the next fiscal year by year-end. But Abe’s decision to call a snap election in December has led to a delay in the process.
($1 = 116.9600 yen)
Reporting by Leika Kihara; Editing by Shri Navaratnam