TOKYO, Sept 30 — Japanese Prime Minister Sanae Takaichi will pledge a nimble response to any unexpected developments in the economy and financial markets in a policy speech next week.
The Nikkei newspaper reported today that in remarks set for the first day of an extraordinary Parliamentary session on October 5, she will also explain that the government will decide the size of annual debt issuance with an eye on interest rate developments.
"When the economy and markets make unexpected moves, we will analyse the impact and respond nimbly," Takaichi is expected to tell Parliament, according to a draft of the speech reviewed by Nikkei.
While the administration has ruled out compiling a supplementary budget, she will explain how it will respond nimbly depending on economic conditions.
The Prime Minister's Office was not immediately available to comment.
Takaichi's ambitious spending plans have come under attack from markets, with concern over Japan's worsening finances sending the benchmark government bond yield on track for a fifth straight quarter of double-digit increases on Wednesday.
In an interview with the Yomiuri newspaper last month, she said the government will aim to cap new bond issuance at ¥40 trillion (RM1.04 trillion) for next fiscal year's budget.
The administration has also pushed back against market views branding its policies as "reflationist," emphasising that it was mindful of the need to keep Japan's fiscal house in order.
But the Prime Minister's administration's failure to lay out details on how to fund a plan to temporarily suspend a levy on food items, as well as an expected increase in defence spending, has kept bond markets jittery.
