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Japan’s Debt Reaches One Quadrillion Yen

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japan-yenJapan is still struggling to get a grip on its spending, as the country’s eye-watering national debt has topped one quadrillion yen, official data showed.

The record figure, which underlines Tokyo’s struggle to curb its huge borrowings, was supplied by the finance ministry. The figure of 1.008 quadrillion yen by the end of June is equivalent to about US $10.42 trillion at current exchange rates.

A quadrillion is one thousand trillion.

Tokyo, by proportion, has the dubious distinction of having the biggest debt pile among industrialized countries, with a pile that’s more than twice the size of its current economy.

The majority of that debt is from long- and short-term Japanese government bonds, as well as other borrowing.

The staggering figure, roughly 1.7% more than the previous quarter’s number, comes a day after Japan pledged to cut its budget and have more control on government funding and spending.

Japan has not yet encountered a public debt crisis like the one in the debt-riddled Eurozone, mainly due to its low-interest debts being held domestically rather than by international creditors.

But the International Monetary Fund and others have issued warnings to Tokyo and its ever-increasing borrowing, this after a series of sovereign credit rating downgrades in recent years.

The IMF called on Japan last week to adopt a “credible” fiscal plan to fix its books, which may include raising sales taxes to generate new revenue.

Daniel Patterson

Daniel works as an accountant in a corporation at California. He provides advice when it comes to financial and risk management.

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