The Outlook for Financing Japan’s Public Debt

WPIEA2010019 Image
Price:  $18.00

Author/Editor: Kiichi Tokuoka
Release Date: © January, 2010
ISBN : 978-1-45196-226-0
Stock #: WPIEA2010019
Stock Status: On back-order

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Despite the rapid rise in public debt and large fiscal deficits, Japanese Government Bond (JGB) yields have remained fairly stable. Possible factors include: Japan's sizeable pool of household savings, presence of large and stable institutional investors, and strong home bias. These factors are likely to persist for some time, but going forward, the market's capacity to absorb debt is likely to diminish, as population aging reduces savings inflows and financial reforms enhance risk appetite. This could in turn strengthen the link between JGB yields and the stock of public debt. In light of these structural changes in the market, fiscal consolidation will be key for maintaining market stability.


Economic policy , Fiscal policy

More publications in this series: Working Papers

More publications by: Kiichi Tokuoka