By Tamiyuki Kihara and Leika Kihara
TOKYO, May 28 (Reuters) – Japan’s ruling party will propose issuing “bridging bonds” to fund flagship programmes aimed at boosting growth and economic security, a draft of its proposal showed on Thursday, an idea that underscores politicians’ sensitivity to rising bond yields.
The government would consider including the idea in its medium-term fiscal blueprint due in July, which would be the first compiled by Prime Minister Sanae Takaichi, a government source familiar with the matter told Reuters.
Bridging bonds are used to cover temporary funding needs and are issued with guarantees on specific means to pay for redemption, allowing the government to argue that it is mindful of the need to keep Japan’s fiscal house in order even as it boosts spending.
The idea, first reported by the Nikkei business daily, was included in…
