Prime Minister Junichiro Koizumi instructed his Cabinet and Liberal Democratic Party leaders Tuesday to keep new issues of government bonds "as near 30 trillion yen" as possible in the fiscal 2006 budget.
A projected tax revenue rise will help, he reportedly said.
It was the first time in three years Koizumi has referred to a pledge he made at the start of his administration to cap new issues of government bonds, which are used to finance government spending, at 30 trillion yen to get a handle on rising public debt.
"That pledge referred only to the administration's first year," Chief Cabinet Secretary Shinzo Abe said. "Afterward, public health costs grew, and we put forth what measures and reforms we could."
The government plans to issue bonds worth 34.4 trillion yen in the current fiscal year.
For years, bonds have helped make up for the gap between tax revenues and public expenditures, causing Japan's public debt, including that of local governments, to balloon to the highest in the industrialized world.
The state will need to cut spending and increase tax revenues to slow the pace at which the debt is growing, Abe said.
Tax revenues for fiscal 2006 are projected to rise to around 50 trillion yen, up from 44 trillion yen this year, Koizumi was later quoted as saying.
When he took office in 2001, one of Koizumi's promises was to limit new issues of government bonds to less than 30 trillion yen. This goal was met in fiscal 2001 but abandoned in fiscal 2002 due to a slump in tax revenues. Since then, new issues have fluctuated around 35 trillion yen.
Politicians, Finance Ministry officials and Tax Commission members continue to discuss ways to make a consumption tax hike palatable to the public.