Finance Minister Koji Omi said Monday the government will reduce new bond issues for fiscal 2007 "by a wide margin" amid reports the cut could be as much as 3 trillion yen.

Speaking in Tokyo at a privately sponsored seminar, Omi said annual bond issues have been falling steadily, "from 37 trillion yen to 34 trillion yen" to about 30 trillion yen for the fiscal year ending in March.

"We have been instructed to cut (issues for fiscal 2007 starting next April) by a wide margin" by Prime Minister Shinzo Abe, Omi said.

"A wide margin doesn't mean 1 trillion yen or 2 trillion yen," he added.

Omi's remarks lent weight to media reports that the government plans to limit new bond issues for the next fiscal year to less than 27 trillion yen -- the lowest amount since fiscal 1999 -- to help reduce the public debt, which is the largest in the world and reportedly set to hit 151 percent of GDP.

Bonds fell Monday, with the yield on the benchmark 10-year bond rising to 1.6150 percent from Friday's close at 1.6000 percent.

The government issues bonds to fill the gap between tax revenues and spending. The high government debt has been a burden, and Abe has pledged to rein in spending.

Belt-tightening and a recent pickup in tax receipts thanks to a recovering economy have helped cut new bond issuances over the last few years.

Commenting on the economy, Omi said the recovery is continuing, backed by the private sector. Business spending and corporate earnings are "very high," he said.