Japan to issue ¥22 tril in new bonds to fund extra budget

Japan has decided to issue new government bonds worth 22.1 trillion yen ($192 billion

Just a fancy way to say the money printing machine will keep going 'brrr'

Just laughable - all this debt has to paid back at some stage (even though 95% of it is held by the Japanese public) but the government doesn't care about that as they will be long gone by the time things finally collapse.

Japan has been doing this for years. A high ranking VP of a major bank in Japan told me in confidence to pull all of my money out of Japanese banks soon. He was a friend of a friend.

There will come a point when the Japanese public will stop buying bonds (probably when inflation rises), and at that point they the govt will be unable to raise any new debt. If you can't raise debt, you can't raise funds for infrastructure, pension payments, etc - you can't even service you existing debt. When that happens they will have to go begging the international community for money, which they might get (at significant interest), but more likely, they will get nothing until they clean up their books.

All these countries and companies keep issuing bonds so they can continue spending like a drunken sailor. How come we citizens can't do the same so we can live the good life

LOL...as if Japan is the only country doing this.

LOL...as if Japan is the only country doing this.

Japan is the most indebted (gdp to debt) country in the world.

Under the planned extra budget, about 5 trillion yen will be allocated in subsidies for restaurants and bars that complied with authorities' requests

Even though restrictions have been eased, businesses will be lavishly compensated for losses during the height of the pandemic?

What about some retroactive compensation for the populace?

Or even some real time, proactive assistance for the many still struggling with precarious financial situations?

For those, the only sign this massive stimulus package has gone through will be the tax bills-

nonu6976Today  05:26 pm JST

LOL...as if Japan is the only country doing this.

Japan is the most indebted (gdp to debt) country in the world.

If you think the world will let Japan go under you're dreaming. Far too much invested.

My pea brain understanding is that Japan doesn't need to beg for money as long as it is exporting more than it imports, thus bringing money into the country.

You can't just keep debasing your currency, as that will cause massive inflation is imports costs rise., and there will be a run a banks as people move out of the yen to stronger currencies. Anyway, my point is no country can just continue to print money to pay for things, and expect no consequences - I think we can agree on that.

People are struggling and your answer is to increase the cost of living-great work Kishida. Kicking the debt can down the road didn’t exactly work so well for your predecessor, I give him two years before his party decide to get rid of him..

Oh boy.

Japanese people rely on the government too much. We had better try to earn money by ourselves as much as possible. Printing money → weaker Yen → deterioration of trade balance → weaker Yen ..... Negative spiral, although real world is more complicated. 

Frankly speaking, our long lifespan is one of the reason of our money shortages.

No time to worry about fiscal health when you’re actually starving from malnutrition. A lot of people don’t know the simple fact that the government’s deficit amounts to nothing other than the people’s surplus. And there’s no need to repay those debts.Japan is a sovereign country that issues its own currency. Government debts disappears when the Bank of Japan buys government bonds.

617 billion yen will be allocated to support computer chip-making companies

Japan is so anti-free markets.

Quit the corporate welfare.

there’s no need to repay those debts

= there is no need to give deposits back to bank customers.

No way Jose.

Good News to all, any financial support is welcomed, people and small businesses are on their knees since Suga son took office.

Hah. And most of those bonds aren't basically bought by banks and large companies inside Japan. They have been doing that forever. But i guess this is also why they manage to keep this going. But i ain't gonna complain this time since this money is needed for a lot of stuff. Improving chip making companies and aid small companies to survive the pandemic. Especially if it's use to as financial aid for those who are suffering now.

Whether the debt is owed internally or externally there are only three ways to deal with it, pay it back, inflate it away or default on it.

Why do you think Japanese governments have been so desperate to get inflation going in Japan? Of no long term benefit to the ordinary people but great for finance businesses and government debt, then politicians can squander even more! What’s not to like in that scenario?

How do I buy bonds?

And the yield on these Japanese government bonds? Probably around 0.08% for 10yrs maturation.....what an absolutely terrible investment. It's a joke.

Yes other governments do the same thing but their bonds offer significantly better ROI.

No problem for J-govt to bankroll itself by endlessly issuing bonds while interest rates remain zero. But the day they go up is when you-know-what will hit the fan big time.

A high ranking VP of a major bank in Japan told me in confidence...

It appears his confidence was misplaced

Your children and grandchildren will pay for this debt.. but who cares about more bonds when a country is already drowning in them anyway.

Yes other governments do the same thing but their bonds offer significantly better ROI.

So buy those bonds. If these don't have an attractive enough RoI, people won't buy them. Capitalism mate.

Is this the best solution???.

The return on Japanese bonds is abysmal!

Plenty of other places to put hard earned money!

The return on Japanese bonds is abysmal!

Plenty of other places to put hard earned money!

Sure, but the question isn't whether there are other places to put your money, the question is whether or not people will put their money into these bonds. If the general consensus is in agreement with you, that the RoI is abysmal, then the bonds will not sell, proving your theory right. If they sell, it means that your theory was wrong.

Is that money going to zombie companies?

You can't just keep debasing your currency, as that will cause massive inflation...

If that were true, Japan should have been able to muster up at least some inflation in the past 40 years. It's amazing to hear and read people regurgitating things from some basic economics class decades ago as if it were true. A class with Keynesian theory that doesn't apply to the world today.

If that were true, Japan should have been able to muster up at least some inflation in the past 40 years. It's amazing to hear and read people regurgitating things from some basic economics class decades ago as if it were true. A class with Keynesian theory that doesn't apply to the world today.

True, they wanted to cause inflation.

Yes, but the quality of life has gone down since the bubble, don't you think? No more jobs for life. Plenty of Japanese kids going hungry. Oh and population decline. I think that printed money is not filtering down to where it's needed.

Japan is the most indebted (gdp to debt) country in the world.

No it isn't. Nearly half the "debt" is owned by the BoJ, a public sector institution. The state pension fund and other public entities are among the other biggest owners.

J govt bonds are not "debt," and no they don't "fund" public spending. How could they given the nature of their ownership?

There will come a point when the Japanese public will stop buying bonds...

People have been saying that with great conviction for at least 20 years. How come it's never come true?

A high ranking VP of a major bank in Japan told me in confidence to pull all of my money out of Japanese banks soon. 

This was a big thing about 7 years ago, with many of the wealthy including Diet members, moving assets to Singapore. During that time, Japanese stocks more than doubled in value. If you believed that, you lost out big. My Nikkei fund I bought 6 years ago has returned 110%. Glad I recognized that narrative for the myth it was.

@JeffLee

The bonds that the government issues are mostly bought up by the BoJ, so the debt figures are just computer numbers with 0% interest that the government doesn't need to pay back.

Think about it. If you're given a loan of $1 million with a 0% interest rate with no negative consequences if you don't pay it back, why in the world would you pay it back? Printing money isn't necessarily bad as long as the money isn't given to everyone. If you concentrate it on industries, you can avoid hyper-inflation.

That said, I would advise against investing in anything related to Japan in the coming decades. The first casualty of Japan Inc this decade will be their automotive industry, as Tesla will crush Japanese automakers. This will cause a cascading effect that will threaten small and mid-sized suppliers. Their losses will spread to the entire economy.

I would put your money in TSLA.

@Chibakun

It's a tricky situation, as giving everyone more money just causes inflation.

I don't think Japan printing tons of money and using it to "stimulate" their industries causes any problems aside from complacency. Japan's dismissive attitude towards the coming EV revolution is proof of this. Systemically, Japan can continue to print until they have 9999999999999+% debt-to-GDP ratio, but as that debt is owned by the BoJ at 0% interest, the debt figures are meaningless and will never be paid back.

Japan's quality of life has gone down this decade, but that is not a situation that the Japanese government can correct.