TOKYO (AFX-ASIA) - Eisuke Sakakibara, a former vice finance minister who remains an influential commentatot on the economy, said the government bond market is is not in immediate danger of collapse, though fund managers' purchases of overseas assets will likely rise toward the year-end. He added that despite rising offshore investment local investors are, for now, restrained. "I think there will be no collapse in the Japanese government bond market for now but some event in the future may trigger such a collapse," he said, noting that local institutions have already begun buying overseas bonds in recent months. "Japanese investors have already been substantially purchasing overseas bonds using hedging," Sakakibara told a conference of business leaders. "Looking at these three to four months, they have been buying considerable amounts of Treasuries and will likely increase these purchases into the year-end because they think Japanese government bonds are becoming risky." Sakakibara said the government's promise of keeping new bond issues below 30 trln yen seems impossible to keep without further spending cuts. "It is almost impossible for the government to compile a budget for the next fiscal year that limits new bond issues within 30 trln yen unless it can cut spending substantially," he said. "Some (Ministry of Finance) officials responsible for the budget are complaining that we cannot compile a budget, without issuing large amounts of new government bonds, under conditions of negative growth," Sakakibara said. "Further monetary easing will not help boost the economy even if inflation targeting is introduced," he added. Sakakibara said the government needs to push through economic restructuring to encourage overseas investors back into the domestic financial markets. "Foreign investors, who had been vigorously buying Japanese stocks from April through half of the July-September period have held off further investments because structural reforms have not shown substantial progress. "Demonstrating some signs of progress on reforms will restart purchases by foreign investors because their stock portfolios are at quite a low level and they are eager to buy Japanese equities," he said.