Japan’s Debt Mountain: How is it Sustainable?

by Etienne Balmer
Japan Today


Already the global leader in accumulating debt, Japan is adding nearly $2 trillion to its mountain this fiscal year with record stimulus packages to cushion the impact of coronavirus.

With debt levels around two and a half times the size of its economy, Japan manages to keep government bond yields ultra low and investor confidence high enough that it can avoid default.

How did we get here?

Whichever way you look at it, Japan’s debt is unfathomably large. According to the Bank of Japan (BOJ), at the end of 2019, it stood at 1,328,000,000,000,000 yen.

This is equivalent to around $12.2 trillion, just over half the total amount of U.S. debt in absolute terms but by far the biggest pile when measured against the size of even Japan’s mighty economy (around 240 percent of gross domestic product).

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