Costs for Japan quake reconstruction may total $184bln

PanARMENIAN.Net - Japanese Economics Minister Kaoru Yosano said on May 22 the government may need to spend 10 trillion yen to 15 trillion yen ($184 billion) for reconstruction from the devastating earthquake that hit the country's northeast in March.

The government may need to issue bonds to meet the costs but should not do so without coming up with ways to pay for redemption, Yosano said, signaling that some form of tax hike would be inevitable.

"I understand those who say we need to issue bonds for quake (reconstruction). But we shouldn't borrow recklessly without thinking about how to pay the money back," Yosano told a television program.

"If we were to issue bonds for reconstruction, we need to decide in how many years we would pay the money back and how. That's important in maintaining market trust in Japan's fiscal state," he said.

Japan is reeling from the triple disaster of an earthquake, tsunami and prolonged nuclear crisis, with the government struggling to find ways to pay for the biggest reconstruction effort since the aftermath of World War Two.

Damage from the quake pushed Japan into recession with the economy shrinking much more than expected in the first quarter and set to contract again in April-June as power shortages and supply chain disruptions hit factory output, Reuters reported.