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ECONOMY

Aso says Finance Ministry and press are “crying wolf”

  • May 13, 2020
  • , Tokyo Shimbun , p. 6
  • JMH Translation

By Ryuta Atsumi

 

In a May 12 press conference, Finance Minister Taro Aso likened the Finance Ministry and press, who had pointed out that Japan may lose financial credibility due to the government’s excessive debt, to the “boy who cried wolf.” The amount of government bonds issued in fiscal 2020 will reach a record high due to the enactment of massive economic measures. The top finance ministry official expressed an “optimistic view” that runs counter to the views of the ministry.

 

The government issues bonds, which are purchased by private banks, in order to obtain cash to implement its policies. Many experts have cautioned that the issuance of more bonds will lead a rise in interest rates, and government finances will be strained by interest payments.

 

Asked about the ill effects of increased issuance of government bonds, Aso said “(the press) keeps pointing out that interest rates will go up, like the boy that cried wolf. The Finance Ministry does the same thing.” Aso said that he will “consider economic measures that maximize (the low interest rates).”

 

The Bank of Japan (BOJ) continues to push the 10-year rate for government bonds to near-zero rates by buying bonds from banks. Nearly half of the issued government bonds are now owned by the BOJ. Many regard the BOJ’s excessive purchasing of bonds as suppressing the interest rate. Aso opined that “someone will buy government bonds even if the BOJ does not.”

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