Japan's government plans to cut new bond issuance to a seven-year low in fiscal 2016 even as annual budget spending hits a record high, helped by higher tax revenue on rising corporate profits, government sources told Reuters. The government will lower new bond issuance to about 34 trillion yen ($280 billion) in the fiscal year that starts in April from 36.9 trillion yen this year, the sources said. It would be down for a third straight year and mark the lowest level for an initial budget since fiscal 2009.
The draft budget for the next fiscal year is set to rise to the upper 96 trillion yen range from the current year's 96.3 trillion yen, reflecting rising social welfare costs in a fast-ageing society as well as military outlays, the sources said on condition of anonymity because the plan has not been finalised.