What factors does the Japanese government look at when deciding how much new government debt to issue?

Updated June 6, 2025 • 1-min read

Posted by Anonymous

Jun 5, 2025

1 answer

debtbudgetgovernment-bondslawjapan

1 Answer

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Posted by Anonymous - Jun 5, 2025

From what I get, the Japanese government has to do a ton of homework before they decide how many bonds to put out there. They basically look at how much money they need for things like roads, schools, healthcare, and also how much old debt they gotta pay back. Then they also think about what will happen to interest rates if they put out too many new bonds. Like, if they offer too much debt all at once, interest rates might jump up, which costs everyone more.

There's also pressure from the Bank of Japan and investors. If the BoJ isn't buying as much, the government might slow down on "super-long" bonds, like those 30-year ones, to avoid people getting nervous and spiking yields. I've read they might even cut back on some of those really long loans to keep everyone calm. It's almost like they're walking a tightrope, trying not to freak out the markets, but still fund all the government stuff. My high school economics teacher said it's way more of an art than a science and that all this juggling is what keeps government accountants up at night!

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