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Ekonomické zprávy
13.10.2021

Caution needed in any mulling of perpetual bonds - Japan’s Prime Minister

Bloomberg reports that according to Japan’s Prime Minister Fumio Kishida, caution is needed if considering making some of the Bank of Japan’s bond holdings perpetual.

“From the perspective of stable financing and retaining trust in Japan’s fiscal policy, consideration of these ideas needs to be cautious,” said Kishida.

The BOJ has assets that surpass the country’s economy in size as a result of its massive asset buying program. But if some of the bank’s bond holdings become perpetual, it would relieve the government from having to pay back the principal, thus easing its already major debt-servicing costs. 

Otsuka’s party also suggests the creation of a special bracket of debt to fund education. The party argues that 5 trillion yen ($44.1 billion) a year should be funneled toward education for a decade. That would double Japan’s current budget for education, science and technology, an increase the party says would boost future growth and tax revenues.

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