The government budget for fiscal 2005 has been enacted, but the amount dependent on government bonds, although slightly lower than in fiscal 2004, is still above 40 percent.
At the end of March, the amount of outstanding national government bonds stood at 499 trillion yen. If refinancing bonds are included, the government's bond issuance is expected to reach 170 trillion yen in fiscal 2005 alone, pushing the outstanding amount to 540 trillion yen by the end of March 2006. If local government bonds are included, the total amount may reach 750 trillion yen.
Fresh efforts are needed to help the market absorb these bonds. One such effort has been a campaign to promote JGBs to overseas investors. Seminars were recently held in London and New York to explain simplified procedures for claiming tax deductions on purchases of JGBs, as well as legal changes that have paved way for foreign corporations to own inflation-indexed Japanese government bonds.