TOKYO, May 16 (Reuters) - Japan is set to keep its annual calendar-based government bond (JGB) sales to the market steady at initial 198.6 trillion yen when it compiles an extra budget for this fiscal year to March 2023, a draft plan seen by Reuters showed.
The revised JGB plan follows government's issuance of fresh deficit-financing bonds worth 2.7 trillion yen to fund an extra budget aimed at helping households and small firms cope with surging fuel prices and cost of living amid the Ukraine war.
The government will avoid a rise in calendar-based bond sales to the market by front-loading refunding bond issuance for the next fiscal year to level annual JGB issuance, the draft said.
The government is set to earmark additional spending in the extra budget, including 1.2 trillion yen in subsidy to gasoline wholesalers and additional 1.5 trillion yen in topping up budget reserves.
The draft underscores the importance for Japan to win market confidence in debt management. The rounds of heavy extra spending to battle with the pandemic has further strained the industrial world's heaviest public debt burden at more than double the size of Japan's $5 trillion economy.
($1 = 128.9400 yen) (Writing by Tetsushi Kajimoto; Editing by Rashmi Aich)
