Japanese Finance Minister Masajuro Shiokawa said the government has not decided whether to sell more 30-year bonds for the year through March of next year because it hasn't confirmed if investor demand is strong enough.
"We would like to sell more 30-year bonds," Shiokawa said at a press conference in Sendai in northern Japan.
If the finance ministry fails to see sufficient demand within a reasonable period, however, he said "we don't necessarily need to issue more 30-year debt."
The Ministry of Finance last week said it will increase sales of 20-year bonds by ¥600 billion to ¥5.4 trillion in the current fiscal year.
Shiokawa said the ministry based its decision on growing demand from investors such as life insurance companies who want to earn higher yields than on 10 year bonds.
Japanese government bonds due in 2013 rose yesterday, pushing yields down 3 basis points to 0.87 percent, according to Japan Bond Trading Co.
For the week, benchmark yields fell 9 basis points, the biggest weekly decline since November.
A basis point is 0.01 percentage point.
The finance minister also said he sees no need for the government to draft an extra budget and increase state spending this fiscal year to boost economic growth.
"The Japanese economy has somewhat bottomed and is beginning to improve," Shiokawa said.
"Given the current situation, there is no need for an extra budget," he added.
Prime Minister Junichiro Koizumi has pledged to eliminate unneeded spending and stop the expansion of Japan's public debt, which will reach ¥693 trillion in March of next year, equivalent to 140 percent of GDP.
Shiokawa repeated that Japan's growth may exceed government projections of 0.6 percent in the current fiscal year.
Japan this week said it has raised its economic outlook for the first time in five months, citing rising stock prices, growth in demand for exports, and improvement in unemployment rates.
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