Japan: Gov't Eyes Issuance of Bridge Bonds

The government in Japan is considering issuing bridge bonds as early as fiscal 2024 to make up for an expected shortfall in funding to boost child-rearing support, a key policy goal of Prime Minister Fumio Kishida, sources with knowledge of the plan said Wednesday.

Bridge bonds are the same as deficit-covering bonds but the government specifies in advance the funding source to repay them. For the envisaged issuance of childcare bonds, likely spanning over two years, the government is expected to use increased social insurance contributions, the sources said, Kyodo News reported.

Kishida sees the country's falling birthrate as a national crisis that requires "unparalleled" child-rearing support, and his government is considering doubling the child policy-related budget in the early 2030s. Earlier this week, the prime minister ruled out raising taxes to enhance childcare support.