Japan’s Ministry of Finance reported that the public debt rose 1.4% from April to June. At present, it amounts to ¥1,039 trillion or $10.2 trillion.
As of Q1 fiscal year 2014 starting April 1, Japan’s sovereign debt surged ¥14 trillion or $137 billion. According to the flash estimates of the Ministry of Finance, the debt amount might expand to ¥1,143 trillion or $11.2 trillion by March 31, 2015 (or by the end of Japan’s fiscal year). Currently, the public debt thrice surpasses its GDP value. So, the Land of the Rising Sun has the largest national debt among the G7 countries.
Analysts fear that Japan’s long-term bonds could become less attractive amid rocketing public debt. Indeed, lack of interest in Japan’s bonds from market participants can rise government bond yields that will eventually cause increase of interest rates. It might snowball the deflation situation. Meanwhile, the Bank of Japan focuses its efforts to tackle the deflation problem.
