Japan Debt: Updated August 30, 2024.

 

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

Article Source:  https://mainichi.jp/english/articles/20240809/p2g/00m/0bu/044000c

Ideas:

The Japanese economy and the Japanese government have been in this situation for a very long time, and it doesn't look like its going to end anytime soon.

The Japanese government always says its going to reduce the debt but like households, emergencies and other priorities come up which delays plans to lower the debt.

So far, the Japanese economy has not suffered related to the high debt but that doesn't mean things will be the same many years later and maybe the pension and other Japanese government programs might be hurt or reduced.

There are going to be some positives and negatives related the Bank of Japan increasing the key interest rate, but it depends on who you are in the economy for positives and negatives.

For banks its going to be a positive it that they can get more for their loans they give to businesses and households.

For households and businesses they will have to pay more for loans which could be a challenge for small businesses who need loans just to survive the current inflation situation.

The BOJ has used the government debt situation , or bond buying as way to help a stagnant economy grow, but without much success.

Japan, like some or many countries uses fiscal spending as a way to help the economy and or help society. Japan has been doing it for decades, and maybe its one of largest fiscal spenders among advanced economies. 

Most of Japan's debt is owed by Japan and is internal, compared to the 2010 Greece situation where most of the Greece debt was external, owed by other countries.

So there is very little chance of other countries calling in the debt owed to them, as Japan owns most of the debt.

While its not good, it can easily print more money or put more money into the banking system without much interference.

Have a nice day and be safe!