Japanese Finance Minister Katsunobu Kato announced on Tuesday that the government will closely watch the bond market ahead of this week’s auction of super-long government debt.
He warned that rising interest rates could increase the cost of debt servicing and put pressure on state finances. Kato stressed the importance of careful debt management and ongoing communication with investors to respond to market changes.
The focus is on the upcoming sale of 40-year bonds, Japan’s longest maturity, scheduled for Wednesday. This follows recent global sell-offs in long-term debt and a decline in bond purchases by Japan’s central bank. Political debates over stimulus measures have also heightened concerns.
On the same day, the government announced it would allocate 388 billion yen (about $2.72 billion) from reserve funds to support an emergency economic package.
This package aims to ease the impact of new U.S. import tariffs on Japanese industries and households. It includes corporate financing support and subsidies to reduce gasoline prices and partially cover electricity bills.
While additional stimulus measures are under consideration ahead of the July upper house election, senior ruling party lawmakers indicated an agreement with coalition partners to avoid issuing fresh deficit-financing bonds.
Regarding reports that SoftBank CEO Masayoshi Son is proposing a Japan-U.S. sovereign wealth fund, Kato said the finance ministry is not aware of any specific plans. The idea, reported by the Financial Times, involves a joint fund to invest in technology and other sectors in the U.S.
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