Japan’s government plans to cap new bond sales and budget spending as it attempts to slow the expansion of the world’s largest public debt burden.
Bond issuance for the year starting April 1, next year, will be held at ￥44 trillion (US$559 billion) according to a framework released on Friday by the Cabinet Office.
General spending, excluding debt servicing costs, will be limited to ￥71 trillion for the three years starting April 1.
Parliament passed a law this month doubling the sales tax to help rein in the nation’s record debt and pay for soaring welfare costs. The government estimated in January that it would probably miss its goal of balancing the budget by 2020.
Japan must “work for both economic growth and fiscal consolidation,” and it is necessary to “secure the acceptance of the markets as well as revitalizing the economy,” the plan said.
The government already planned to limit expenditure for the fiscal year starting April 1 to ￥71 trillion, according to budget guidelines approved by the cabinet earlier this month.
This fiscal year, interest payments on debt are more than 24 percent of total government spending.
Meanwhile, Japan plans to downgrade its assessment of the domestic economy for the first time in 10 months due to the impact of a slowdown in China and other countries, the Nikkei newspaper reported.
The government will cut its view on production and exports in its monthly report to the cabinet because of declines in sales to China and Europe, the Nikkei reported. Japanese Economy Minister Motohisa Furukawa will present the report on Tuesday, the newspaper said.
The downgraded assessment reflects increased pessimism about the outlook for the world economy, with Japan’s exports to Europe last month falling to the lowest level since February 2009 and the pace of China’s expansion set to decline for the seventh straight quarter.
Last month’s report stated that while domestic demand was supporting the economy, a global slowdown was becoming more widespread.
The government plans to tone down the assessment of the domestic economy in this month’s report by adding words such as “weaker movements in some sectors,” the Nikkei reported, after the country had a wider-than estimated trade deficit last month due to a fall in exports to China and Europe.
Japan’s shipments to the EU fell 25 percent last month from a year earlier, while those to China slipped 12 percent, the Japanese Finance Ministry said on Wednesday.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS