Japanese economy will sell new bonds to cover tax shortfall

Tuesday, October 20, 2009, 10:03 GMT

Following the 2009/2010 tax shortfall in Japan, Japan finance minister, Hirohisa Fuji has stressed, Tuesday at 01:42 GMT, the pressing need for Japan to sell new bonds to cover and to meet the tax deficit for FY 2010.

Japan needs to raise an additional $66.5 billion in bond sales to cover its revenue shortfall. The global downturn has beaten down on the Japanese economy with Yen values rising in the recent past, causing a downturn in export revenues. Tax revenues for the fiscal year to next March are expected to fall below 40 trillion yen. This exceeds 6 trillion short of an initial estimate.

Plans to issue 44 trillion in bonds this fiscal year are set to be put in action. 20-year JGB yield rose to the highest in two months. At 04:24 GMT, JPY longs have been downsized by 25% asserting a reduced demand in the JPY on the exchange in the near future.