Fearing domestic investors may no longer be willing to help cover the nation's expenditures, the Finance Ministry is turning to foreign investors to buy more government bonds.

The ministry for the first time later this month will hold meetings in the United States and Europe aimed at snagging overseas interest.

And from April, new regulations will greatly simplify purchasing procedures.

Only about 4 percent of Japanese government bonds are currently held by overseas investors.

That has raised concerns that Japan may not be able to count on domestic investors alone to cover the issuance of large-scale government bonds in the years ahead.

Thus, the ministry has no choice but to broaden the ranks of bond holders. By the end of fiscal 2005, combined outstanding debts held by the central and local governments are projected to reach a staggering 774 trillion yen.

Thus, ministry officials are tasked with trying to maintain the confidence of foreign investors in the nation's fiscal health.

The first meeting being held to attract foreign investors is slated for Jan. 18 in London. Another meeting is set for Jan. 20 in New York.

It is projected that more than 200 institutional investors will participate in each of the two meetings, at which senior Finance Ministry officials will explain economic trends in Japan and the government's fiscal policies in the effort to urge participants to invest heavily.

Similar meetings may also be organized elsewhere. Cities in Asia and Germany are under consideration.

From April, the documents that foreign investors must present to receive tax-free treatment for bond purchases will be standardized and simplified.

In addition, foreign investors will be able to purchase inflation-linked bonds, which are popular among domestic investors.

The bulk of Japan's government bonds are held by the government and financial institutions. Foreign investors held only a 4-percent stake as of the end of September.

The situation is different in Europe and the United States, where overseas investors hold much higher percentages.

In the United States and Germany, about 40 percent of government bonds are held by foreign investors.

The reason for the low percentage in Japan is partly attributed to cumbersome purchasing and other procedures.

In fiscal 2005, bonds issued to deal with large-scale redemption of financial instruments issued as economic stimulus measures in the latter half of the 1990s will total 103 trillion yen.

In fiscal 2008, the figure is forecast to hit 134 trillion yen. It is also considered likely that subsequent bond issues will continue to top 130 trillion yen each year.(IHT/Asahi: January 11,2005)