Japan drafts 760 billion dollar budget with record-high bond issuance

[ozymandius]

TOKYO (AFP) - Japan said Wednesday it had drafted a 760 billion dollar budget for the next fiscal year, with rising social security and debt-servicing costs pushing up planned bond issues to a record high.

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It calls for government borrowing to rise 0.4 percent to 36.59 trillion yen, or 44.6 percent of spending, topping the previous record hit this year.

Parliament will discuss the budget when it reconvenes in January for a 150-day ordinary session. The overall figure for the budget rarely changes after parliamentary debate.

The budget, and a supplementary budget for the current fiscal year adopted earlier, will together nearly double the amount the government can spend on currency market intervention to 140 trillion yen from 79 trillion yen now.

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I posted this on the stock watch thread but think it merits larger discussion here.

Japan is one of the biggest buyers of our national debt. What's going to happen when Japan must go into debt to support our debt? What could happen if Japan's efforts to float the dollar fails upon the wholesale slide of the dollar? Does this sound like they are betting the farm on their efforts to sustain the dollar in currency markets?