Prime Minister Shinzo Abe said Monday that planned new government bond issues for the next fiscal year will be cut by the largest margin on record.

Such a cut would reduce the size of the bond issuance to less than 26 trillion yen, from the current 30 trillion yen.

The government is under pressure to cut the swelling budget deficit, especially at a time when spending on social welfare is rising as the population rapidly ages.

Abe also needs to improve the government's debt situation because this will have a bearing on the consumption tax. Any plan to sharply raise the consumption tax would hurt his approval ratings ahead of July's Upper House election.

"We're aiming at the largest-ever reduction in new bonds for the next fiscal year. I ordered the finance minister to form a budget with this policy," Abe said.

The cut is likely to be more than 4.42 trillion yen because the largest reduction ever was for this fiscal year, which ends March 31, when new bond issues were set at 29.97 trillion yen against 34.39 trillion yen a year earlier, according to the Finance Ministry.

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

The fiscal deficit has been swollen by a decade-long economic slump and stimulus packages from the 1990s.

Junichiro Koizumi tried to limit new bond issues at 30 trillion yen but was forced to break the cap a few times due to a stagnant economy.