Japan's Suga says no limit to bonds government can issue

TOKYO: Japan's Chief Cabinet Secretary Yoshihide Suga, who is set to become prime minister this week, said on Sunday (Sep 13) there was no limit to the amount of bonds the government can issue to support an economy hit by the coronavirus pandemic.

He also indicated he could look to a third extra budget to fight the downturn caused by the COVID-19 pandemic if needed, adding the government had enough resources to tap at present.

"Only when we have economic growth can we push through fiscal reform. What's most important is to create jobs and protect businesses," Suga said on a television programme.

"I don't think so," he said, when asked if there was a limit to bond issuance. "What's important now is to improve current (economic) conditions," he added.

READ: Japan's Suga, likely next PM, says he is ready to top up payouts to ease COVID-19 pain

Suga made the remarks on a programme where he appeared alongside his two rivals in the ruling Liberal Democratic Party's (LDP) leadership election, to be held on Monday.

Speculation is mounting that Suga, who has seen his popularity rise in opinion polls since announcing his bid for the top job, may call a general election as early as next month to improve his chances of winning a full three-year term as LDP leader.

Finance Minister Taro Aso told supporters in eastern Japan on Sunday that Suga's Cabinet may be criticised for not having a popular mandate and that in that case, "imminent" snap elections could be possible, the Nikkei daily said.

LDP junior coalition partner Komeito has spoken against snap elections anytime soon. Suga has been vague on the subject.

Prime Minister Shinzo Abe said last month he would resign due to ill health. The winner of the party vote is virtually assured to become prime minister because of the LDP's parliamentary majority.

Suga also told a separate programme on Sunday that he could consider another stimulus budget if necessary.

"Japan's GDP suffered its biggest postwar contraction in the second quarter, so we need to do whatever it takes to support growth. We have reserves set aside, so we can of course tap that. But if additional steps are necessary, we would act," he said.