Japan Sets 40 Trillion Yen Bond Issuance Target for FY27

Japan's government has set its sights on capping new bond issuance at approximately 40 trillion yen ($251 billion) for fiscal year 2027, according to Prime Minister Sanae Takaichi in a recent interview with Yomiuri newspaper.

This target is slightly higher than the current fiscal year 2026 budget's planned new debt issuance of 32.7 trillion yen.

Takaichi cited the case of the fiscal 2025 budget, where increased tax revenues helped offset the burden of an extraordinary budget and allowed bond issuance to remain below the previous year's level at around 40 trillion yen.

The Prime Minister also mentioned that her government plans to incorporate supplementary budgets into the initial budget, which could potentially inflate headline expenditure in the first budget.