TOKYO, Aug 20 (Reuters) – Japan’s government plans to
raise its long-term interest rate estimate used to compile the
state budget to 2.1% for the next fiscal year from the current
year’s 1.9%, the Nikkei business daily reported late on Monday.
The plan reflects rising government bond yields as the Bank
of Japan raised interest rates in a shift away from a
decade-long stimulus programme, the Nikkei said.
As a result, debt-servicing costs are estimated to increase
to 28.9 trillion yen ($197.16 billion) for the year starting in
April next year, up sharply from 27 trillion yen for the current
year, according to the Nikkei.
The overall proposed budget is likely to exceed 110 trillion
yen for the fourth consecutive year, it added.
The interest rate estimate is automatically calculated,
taking into account the underlying bond yield plus a
precautionary 110 basis points in case interest rates spike.
The estimated rate for the next fiscal year will be
finalised in the budget compilation in December.
($1 = 146.5800 yen)
(Reporting by Makiko Yamazaki; Editing by Sandra Maler)
