Japan’s government is planning to suspend some state spending as it could run out of cash by October, with a deficit financing bill blocked by opposition parties trying to force Prime Minister Yoshihiko Noda into an early election.
The impasse in Japan’s parliament has raised fears among investors that the world’s third largest economy is being driven towards a “fiscal cliff”, Reuters reported.
“The government running out of money is not a story made up. It’s a real threat,” Finance Minister Jun Azumi told a news conference, making a last-ditch appeal for cooperation by opposition parties to pass the bill.
“Failing to pass the bill will give markets the impression that Japan’s fiscal management rests on shaky ground,” he said.
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