Nov. 10 (Bloomberg) -- Japanese Finance Minister Hirohisa Fujii said he’s “very concerned” about a recent increase in interest rates, a day after yields on 10-year government debt climbed to the highest in more than four months.

“Maintaining the trust of investors in the government bond market is our priority,” Fujii said at a news conference in Tokyo today.

Bond yields have been rising since the Democratic Party of Japan won power in August, on concern that the government’s pledges to support households will swell the world’s largest public debt. Japan’s debt burden will climb to twice the size of the economy next year, according to the Organization for Economic Cooperation and Development.

Ten-year yields fell 1.5 basis points to 1.46 percent at 1:01 p.m. in Tokyo. They are up from 1.31 percent before the party won an Aug. 30 election and climbed to 1.475 percent yesterday, the highest level since June 17.

Fujii acknowledged that the country’s worsening fiscal health is one reason for the recent gain in yields and said the government will do its utmost to eliminate such worries by restraining spending next year.

“The most pressing issue we have to bear in mind when we outline next fiscal year’s budget is that government bond yields are surging,” he said.

Fujii reiterated that the government will try to ensure new bond sales don’t exceed 44 trillion yen ($489 billion) in the year starting April 1, the amount initially budgeted for the current period. Declining tax revenue in the wake of the country’s worst postwar recession may mean debt sales will climb to a record 50 trillion yen this business year, Vice Finance Minister Yoshihiko Noda said last month.

‘Strong Commitment’

“Although it will require a strong commitment, it’s possible,” to keep bond sales below 44 trillion yen, Deputy Prime Minister Naoto Kan told reporters in Tokyo today. Investor concern about debt sales could be reduced if the government underscores this goal, he said.

The DPJ has promised to provide child care allowances to families, make high-school tuition free, and cut gasoline taxes and highway tolls. A Yomiuri newspaper survey published today showed 85 percent of respondents said Prime Minister Yukio Hatoyama’s administration should shelve some spending promises to limit bond sales.

When asked to comment about the report, Fujii said the government will be able to maintain the confidence of investors in Japanese bonds while also fulfilling its election pledges.

The approval rating of Hatoyama’s Cabinet dropped eight percentage points to 63 percent, according to the Yomiuri poll, which was conducted by telephone Nov. 6-8.

To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net

Last Updated: November 9, 2009 23:04 EST