TOKYO -(Dow Jones)- Japanese Finance Minister Hirohisa Fujii reiterated Thursday his government's commitment to keeping the amount of new government bond issuance in fiscal 2010 below Y44 trillion.

"The fact is that economic society is operating on the assumption of (issuance not to exceed) Y44 trillion, and the market for government bonds is also operating on assumptions of Y44 trillion," Fujii said before the government's Lower House Budget Committee.

The comments represent Fujii's latest attempt to assuage concern that the government could be forced to break its pledge to keep new government debt issuance under Y44 trillion in fiscal 2010.

Speculation that any further falls in tax revenues could prompt the government to go back on that pledge has been one factor in recent rises in yields on Japanese government bonds, analysts said.

Demand at an auction of new 10-year government bonds was tepid Thursday, while the yield on October-issue 10-year bonds rose to a 12-week high at 1.435%.

Fujii has expressed concern over such climbs in interest rates, which could complicate the government's efforts to revitalize the economy by depressing public-sector borrowing and making it more expensive to service the country's massive public debt.

-By Andrew Monahan, Dow Jones Newswires; 813-6895-7553; andrew.monahan@dowjones.com

(Megumi Fujikawa and Takashi Mochizuki contributed to this story.)

(END) Dow Jones Newswires

11-05-09 0100ET