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Economy

Japan to float 2.7tn yen in bonds for stimulus spending

TOKYO -- Japan looks to issue 2.75 trillion yen ($27.3 billion) in construction bonds to fund stimulus spending in a supplementary budget devised Monday.

The budget contains 4.11 trillion yen in general-account spending, primarily on infrastructure, public works and policies to address Japan's demographic challenges. Plans for direct state spending total 4.52 trillion yen, including 402.3 billion yen for ongoing recovery from the March 2011 earthquake and tsunami disaster in the northeast. The cabinet is to adopt the plan Wednesday, and send it for legislative approval during this autumn's Diet session.

Public works spending accounts for 1.96 trillion yen of the plan. Of that, 413.9 billion yen and 545.6 billion yen are allotted to recovery from April's earthquakes in southwestern Japan and the March 2011 quake, respectively. Disaster prevention and mitigation efforts get 804.9 billion yen. The remaining 204.4 billion yen will be used to improve Japan's Coast Guard and Self-Defense Forces.

Another 713.7 billion yen will be devoted to measures designed to boost labor participation, including 367.3 billion yen to provide 15,000-yen subsidies for low-income earners and 54.5 billion yen to expand child care access. Plans for infrastructure spending amount to 1.4 trillion yen. Policies to strengthen Japan's agricultural sector ahead of the ratification of the Trans-Pacific Partnership trade pact are allotted 431.7 billion yen.

Savings in debt-servicing costs resulting from low-interest rates will provide 417.5 billion yen in funding for the budget, in addition to the construction bonds. A reserve fund set aside following the April earthquakes will provide 410 billion yen.

Japan also looks to provide 3.6 trillion yen to private companies through its Fiscal Investment and Loan program to speed up construction of a high-speed magnetic levitation train line and new bullet train routes. This will involve issuing 3.1 trillion yen in special bonds.

The supplementary budget covers part of a massive economic stimulus plan Japan unveiled Aug. 2. The remainder will be funded through the fiscal 2017 national budget and other future measures.

(Nikkei)

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