Japan plans US$128b reconstruction bonds

TOKYO: The Japanese government plans to issue 10 trillion yen (US$128 billion) in reCONSTRUCTION []
bonds and cut spending by 3 trillion yen to pay for more projects to
rebuild the devastated northeast, the Nikkei business daily reported on
Sunday, July 24.
Investors are counting on reconstruction spending to help the world's
third-largest economy pull out from a slump caused by a massive
earthquake and tsunami in March and to resume moderate growth in the
third quarter.
A government source told Reuters last week it was planning additional
spending of 13 trillion yen (US$165 billion) for reconstruction
projects, on top of a combined 6 trillion yen already set aside in two
extra budgets.
The source had said the government was considering issuing special
bonds, scaling back other spending plans and selling national assets.
The Ministry of Finance was planning on five-year bonds, with the
government considering raising taxes to repay them, according to the
source.
The Nikkei said about 8-9 trillion yen of the 13 trillion yen would
be spent to improve infrastructure, while 3 trillion yen would go
towards building schools and creating jobs.
The draft blueprints for the government's reconstruction projects
will be finalised this month by a reconstruction task force headed by
Prime Minister Naoto Kan, the paper said. – Reuters