Takaichi Sets 40 Trillion Yen Bond Issuance Target Amid Record Budget Requests

Japan's Prime Minister Sanae Takaichi announced plans to cap new government bond issuance at around 40 trillion yen ($251 billion) for the fiscal 2027 budget. This target is similar to the fiscal 2025 budget, but significantly higher than the current fiscal 2026 budget of 32.7 trillion yen.

The move comes as Japan's budget requests from government ministries and agencies are expected to exceed 130 trillion yen, setting a record for a fourth consecutive year. This has put pressure on the government to explain how it plans to fund its spending, including a centrepiece effort to slash the consumption tax on food.

Takaichi also mentioned that the government could tap into foreign exchange reserves, worth $1.3 trillion, to fund her plan. The finance ministry has requested a record 36.64 trillion yen ($229.78 billion) for debt-servicing costs in the fiscal 2027 budget, up by 5.36 trillion yen from the current fiscal year.