Japan to Issue 'Bridging Bonds' for Investment Schemes

Japan to Issue 'Bridging Bonds' for Investment Schemes

Japan plans to issue 'bridging bonds' to fund the administration's flagship programmes aimed at boosting investment in growth and economic security areas, the Nikkei newspaper reported on Thursday. Bridging bonds are used to cover temporary funding needs and are issued with guarantees on specific means to pay for redemption.

The idea will be part of a proposal the ruling Liberal Democratic Party will submit to the government on Thursday. The government may include the concept in its medium-term fiscal blueprint due in July. Prime Minister Sanae Takaichi has identified 17 strategic areas to expand domestic investment, requiring several years of government involvement.

Japan's huge public debt and expansionary fiscal policy have kept markets jittery over the country's worsening finances. Since bridging bonds are for temporary funding, they would be excluded from fiscal measurements like the debt-to-GDP ratio.