Japan’s National Debt Hits Record ¥1,346 Trillion, Nears ¥11 Million Per Person

Japan’s national debt exceeded 1,346 trillion yen to reach a record high.

Japan’s Finance Ministry said debt outstanding, including government bonds and borrowings, totaled 1,346.6833 trillion yen as of June 30, according to the Nihon Keizai Shimbun, known as Nikkei, and other local media reports on August 11. That was up 2.8407 trillion yen from March 31.

The debt load has swelled to an all-time high as the government has failed to cover spending with tax revenue alone and has relied on bond issuance and other borrowing to fill the gap.

Based on population estimates, the debt works out to about 10.95 million yen per person. It is projected to rise further. Including a 3.1135 trillion yen supplementary budget passed by Japan’s parliament in June, national debt is expected to reach 1,492.8 trillion yen by the end of this year.

Concerns are also growing that tax-cut policies being pursued by Prime Minister Sanae Takaichi could add to the fiscal burden.

The government is pushing a plan to cut the food consumption tax rate to 1% from 8% for two years starting in April 2027, while also providing subsidies equivalent to 1% to effectively eliminate consumers’ tax burden. The cost of the tax cut is estimated at 5 trillion yen. Takaichi has said the funds will be secured without relying on deficit-financing bond issuance.

Financial markets are also watching whether Japan’s expansionary fiscal policy could drive interest rates higher.

Nikkei said market confidence will depend on how much Japan can curb further growth in national debt as major fiscal demands, including the consumption tax cut and higher defense spending, continue.

Jang Ji-min, contributing reporter at Hankyung.com, newsinfo@hankyung.com