Japan FY 2027 debt-servicing costs likely up 17% at record 36 tril. yen
TOKYO (Kyodo) -- Japan's debt-servicing costs are likely to rise 17.1 percent to a record 36.64 trillion yen ($230 billion) in the next fiscal year, r
Japan's debt-servicing costs for the upcoming fiscal year are expected to surge by 17.1 percent to a record high of 36.64 trillion yen ($230 billion), according to sources familiar with the matter. The Finance Ministry anticipates requesting a total of 38.69 trillion yen in its budget for the fiscal year commencing April, representing a 15.1 percent increase, primarily to account for interest payments and redemption costs.
Japan's fiscal situation remains the most challenging among advanced economies, mainly due to escalating social security expenses resulting from rapid population aging and heightened defense spending as a result of an increasingly uncertain security landscape. The ministry intends to assume an interest rate of 3.8 percent for fiscal 2027, up from 3.0 percent for the current fiscal year, based on sources.
Government bond yields have been on a steady upward trajectory, driven by expectations that the Bank of Japan will persist in raising its policy interest rate following its recent 31-year high of 1.0 percent in June. The yield on the benchmark 10-year Japanese government bond reached an all-time high of 2.945 percent last week, signaling growing concerns among investors.
The precise debt-servicing costs will be determined by the end of this year, according to the sources.
Written by urgent.news from The Mainichi's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
