Japan's state debt tops ¥1,300 tril for 1st time

$9 trillion dollars in debt vs $12 trillion dollars in assets.

Yeah, Japan has a huge debt, but it is far from going bankrupt.

Of that $13 trillion, 86.3% is owned domestically and 13.7% is owned overseas.

What are the people who keep making a fuss that Japan is in danger of defaulting on this thinking?

Japan every year always record budget high, funded by debt?

https://www.nippon.com/en/japan-data/h01546/

 and 13.7% is owned overseas.

Those overseas owners are paid yen for the coupon and then for redemption. What do they do with the yen? There's only one place where yen can be used -- and that's Japan. All the yen eventually comes back to Japan.

Japan every year always record budget high, funded by debt?

great ldp country management?

When the vast majority of debt is domestic, Japan can simply print more cash to pay it off. Therefore not a problem.

Nations with huge foreign debt - such as the US - are the ones in a very dangerous economic position going forward.

@Agent Neo

> What are the people who keep making a fuss that Japan is in danger of defaulting on this thinking?

Sure not a default stricto sensu, as the BOJ can print money indefinitely, but rather an indirect one through high inflation eroding the value of the debt. What just happened with the BOJ having to backpedal immediately after the dramatic market reaction to a tiny 0.15% rate increase shows that the BOJ may not be able to do what it would like to do, making this possibility a real concern.

""While efforts are under way to cut spending, the government relies on debt issuance to fund about a third of its annual expenditure.""

What efforts?? just yesterday civil servants received a pay hike of 2.75% or so, cash being thrown at a meaningless war with no end in sight too.

The BOJ is bankrupt but it acts as if everything under control issuing overdraft check.

Is 1,000 trillion a number? That should be 1.3 quadrillion, shouldn't it?

Basic economics 101, spend less than you earn, something we learn in high school. Seems that the Japanese government hasn't paid attention in class. Since Abe 2012 they have spent more every fiscal year and every year they said the same thing, we need to raise taxes to pay down the debt, guess they learned very quick that the Japanese are gullible enough to feed the same narrative without questions asked . A day will come it will bite them back

the u.s. stands up at the table and says, “$9 trillion? ha! hold my beer and watch this.”

One person’s financial assets is someone else’s debt. That the government is ¥1300 trillion in debt means as much money is in the private sector. Reduce the government debt and you will simultaneously reduce people’s financial assets.

I realize that the picture is a stock photo, but it should really show the new currency which has timed nicely with the recent Yen appreciation.

People should consider the depreciated value of the yen over the past decade before posting embarrassing comments.

Highest debt in the world per capita. Nippon ichiban.

BOJ having to backpedal immediately after the dramatic market reaction to a tiny 0.15% rate increase shows that the BOJ may not be able to do what it would like to do, making this possibility a real concern.

BOJ has not backpedalled, they have merely changed the tone of their announcements. BOJ is in a permanent state of "considering" things and most of the time their announcements mean nothing. Fwiw, I reckon they might have got a "no crash please" phone call. This could be anything, big exposure by some favoured player, a reluctance to have a carry-unwind crash before the US election, you guess is probably better than mine.

"The debt increased by 13.88 trillion yen from three months earlier, as Japan has had to ramp up spending to help households hit by accelerating inflation"

Of course its that! It has nothing to do with the trillions of Yen Kishida is spending on military equipment he wants for the war he wants.

Kishida needs to stand down and let someone more competent run the country.

Highest debt in the world per capita. Nippon ichiban.

These kinds of comments are typical of people who don't understand economics.

@Rakuraku

Isn't Japan's inflation currently stable at around 2%, the level the Abe administration aimed for, in contrast to the high inflation in the US?

Also, I don't think there is a need for interest rate hikes in Japan right now, what do you think? Raising interest rates would lead to higher mortgage interest rates, which would further dampen consumer sentiment.

I think what's needed is for companies to raise wages, or conversely, for the government to increase corporate taxes and reduce income and resident taxes for citizens.

Isn't Japan's inflation currently stable at around 2%, the level the Abe administration aimed for,

The “price stability” target of 2% has been exceeded for months and months now…

Japan‘s leadership literally threw out genuine price stability, and people pointed out that it was folly to believe that the BOJ would magically be able to stop inflation at precisely 2% to begin with.

＠fxgai

For Japan's economy to improve after nearly 30 years of deflation, a certain degree of inflation, an increase in average income, and people's willingness to spend are necessary.

Isn't it the government's role to control inflation to some extent? A sudden rise in the inflation rate is not required in Japan.

It is precisely because this is possible that we can say that we do not have the same inflation rate as in Europe and the United States.

30 years of deflation?

In how many of those years was there actual deflation? And how many not?

All up, it looked like price stability to me.

Isn't it the government's role to control inflation to some extent? 

It had been under control nicely until the recent government decided to switch to price instability of seeking 2% inflation, rather than maintaining price stability.

And it should be an independent central bank’s job, if we are to have one of those. Government politicians seeking election cannot be trusted to do the right long term thing. And unfortunately the government here compromised the central bank who financed all their deficit spending.

I have never believed the idea of some inflation being a good thing. It’s just a deceit in my eyes.

Japan’s problems lay elsewhere, rather than its stable prices. This did see the yen strengthen versus other currencies, but following them down the drain was the wrong option.

I asked ChatGPT for the answer:

“In total, Japan had 12 years of negative CPI growth on an annualized basis from 1980 to 2023.”

I’ll take it!