Japan PM Takaichi to Pledge Nimble Market Response, Cap Bond Issuance at ¥40 Trillion

Japanese Prime Minister Sanae Takaichi will pledge a nimble response to unexpected economic and financial market developments in a policy speech on October 5, the first day of an extraordinary parliamentary session, Nikkei reported Wednesday. Takaichi will also say her government will determine annual debt issuance size with attention to interest rate movements, according to a draft speech reviewed by the newspaper. She has said new bond issuance will be capped at 40 trillion yen ($255 billion) for next fiscal year's budget. The administration has ruled out compiling a supplementary budget but will respond flexibly depending on economic conditions, the paper said. Concerns over Japan's worsening finances have pushed the benchmark government bond yield toward a fifth consecutive quarter of double-digit increases. Markets remain jittery over the government's failure to detail funding for a temporary food levy suspension and expected higher defence spending.