The government led by Japanese Prime Minister Ishiwari Shigeru promised to draft another large-scale spending plan, further deviating from fiscal discipline. This move could lead to increased borrowing. Japan's Deputy Chief Cabinet Secretary Kazuhiko Aoki said at a press conference on Wednesday that the government will draft a plan larger than last year's stimulus plan. On Tuesday, Shigeru Ishiwari said in his speech that the government aims to provide a spending plan through the supplementary budget, which will exceed 13 trillion yen last year. Such huge spending will make Japan different from developed countries, which have basically gradually withdrawn from crisis mode stimulus measures. Meanwhile, the Bank of Japan is raising interest rates from a level close to zero, which will increase the cost of financing Japan's public debt. Japan's public debt is already twice the size of its economy. Analysts said that although the market expects the Bank of Japan to slowly raise borrowing costs and keep the yield on Japan's 10-year treasury bonds below 1%, the prospect of issuing more bonds may begin to hurt bond market sentiment.

The government led by Japanese Prime Minister Ishiwari Shigeru promised to draft another large-scale spending plan, further deviating from fiscal discipline. This move could lead to increased borrowing. Japan's Deputy Chief Cabinet Secretary Kazuhiko Aoki said at a press conference on Wednesday that the government will draft a plan larger than last year's stimulus plan. On Tuesday, Shigeru Ishiwari said in his speech that the government aims to provide a spending plan through the supplementary budget, which will exceed 13 trillion yen last year. Such huge spending will make Japan different from developed countries, which have basically gradually withdrawn from crisis mode stimulus measures. Meanwhile, the Bank of Japan is raising interest rates from a level close to zero, which will increase the cost of financing Japan's public debt. Japan's public debt is already twice the size of its economy. Analysts said that although the market expects the Bank of Japan to slowly raise borrowing costs and keep the yield on Japan's 10-year treasury bonds below 1%, the prospect of issuing more bonds may begin to hurt bond market sentiment.