Japan is reducing their bonds issuance while US is trying to sell national securities to the public.
Japan is on the way to recovery based on revival data from corporates profit.
US corporates profits are stagnating.
Previous years Asia-Pacific countries tried to buy US foreign reserves. Now the emerging markets are experiencing the slow down and they are going to dump their US foreign reserves.
How is the US going to liquidate their national securities holding and international securities holding. I would be amazed.
Mon Dec 21, 2015 | 4:35 AM EST
Japan to cut FY2016 deficit-covering bond issuance to 8-year low: sources
By Takaya Yamaguchi
TOKYO(Reuters) - Japan plans to reduce its deficit-financing bond issuance for fiscal 2016 to below 30 trillion yen ($246.99 billion) to rein in the country's massive public debt, its lowest level in eight years, government sources said.
Overall new bond issue for the fiscal year ending March 31, 2017 is expected to be reduced to 34.43 trillion yen, also the lowest since fiscal 2008, from 36.9 trillion yen planned for the current fiscal year.
The smaller debt program is thanks to hefty tax revenue on the back of rising company profits, the sources told Reuters on condition of anonymity because the plan has not been finalised.
Deficit-financing bonds are seen as a barometer of fiscal discipline because they are issued to fill budget gaps. Cuts in such bond issuance indicate Japan will depend less on debt financing, which would help ease future debt obligations.
Such bonds are expected to account for 28.38 trillion yen of all new borrowing next fiscal year, the smallest amount since fiscal 2008, when the global financial crisis blew out Japan's debt financing program.
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Construction bonds are expected to take up the remaining 6.05 trillion yen, which will be used to help finance public works seen at 5.9737 trillion yen, the sources said.
Japan's fiscal law in principle prohibits issuance of deficit-financing bonds, which are limited to special legislation that must be enacted by parliament when it passes each fiscal year's budgets.
Under a temporary provision agreed upon by the ruling and main opposition parties in 2012, deficit-financing bills have been allowed to be issued without special legislation for three years through the current fiscal year that ends in March.
The cabinet is expected to approve on Thursday a draft budget for the next fiscal year that starts in April, which is seen to hit a record 96.72 trillion yen and include welfare spending worth a record 31.97 trillion yen, they said.
The budget will be sent to parliament for approval early next year, along with this fiscal year's 3.32 trillion yen extra stimulus budget unveiled last Friday.
Tax revenue is expected to hit a 25-year high of 57.60 trillion yen in fiscal 2016. That will allow the government to bring new bond issuance to the lowest since fiscal 2008 when fresh borrowing stood at 33.2 trillion yen, of which deficit-financing bonds made up 26.2 trillion yen, they said.
(Writing by Tetsushi Kajimoto; Editing by Sam Holmes)
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