LDP Divided over JGB Redemption Rule Review

Politics

Tokyo, Jan. 19 (Jiji Press)--Japan's ruling Liberal Democratic Party is divided over a proposed overhaul of the 60-year redemption rule for Japanese government bonds, a funding measure to make possible the country's defense spending increase.

On Thursday, the party's special committee tasked with considering how to secure financial resources for the spending boost other than tax hikes met for the first time.

"We'd like to have responsible discussions on the funding to prevent the enhancement of the country's defense power from becoming a pie in the sky," LDP policy leader Koichi Hagiuda, head of the committee, said at the beginning of the meeting, joined by some 60 lawmakers in the party.

When JGBs reach their maturity dates, the government redeems part of the debts with cash and rolls over the rest by issuing refunding bonds.

Under the current rule, repayments should be completed within 60 years of the issuance of the original bonds. But if the period is extended to 80 years as proposed, the per-year debt-servicing costs will decrease to allow the government to allocate more funds for defense buildup.

[Copyright The Jiji Press, Ltd.]

Jiji Press