Japan's Ministry of Finance released data on the 10th showing that the country's national debt, including government bonds, borrowings, and short-term securities, exceeded 1,342 trillion yen by the end of 2025, setting a new historical record. This figure has intensified market concerns over Japan's fiscal health, particularly under the current administration's advocacy for what it terms "responsible proactive fiscal policy," raising expectations that Japan's debt burden may continue to grow.

The national debt reached 1,342.172 trillion yen as of the end of December last year, an increase of 24.5355 trillion yen from the previous year. The surge is attributed to the issuance of new government bonds to cover budget shortfalls. With rising fiscal pressures from factors such as an aging population and higher prices, the Japanese government is expected to continue relying on bond issuance for funding. The country's debt first surpassed the 1,000 trillion yen mark in 2013 and climbed further during the COVID-19 pandemic. The Ministry of Finance projects that debt will reach 1,473.5 trillion yen by the end of March this year.

Analysts from UK-based financial institution IG Group noted on the 11th that Japan's economic fundamentals as it enters fiscal year 2026 are sobering. According to International Monetary Fund data from October 2025, Japan's government debt-to-GDP ratio stands near 230%, the highest among developed economies. Japan's Chief Cabinet Secretary stated at a press conference on the 9th that steadily reducing the ratio of outstanding government bonds to GDP would help achieve fiscal sustainability and gain market trust. However, reports indicate that planned new bond issuance for fiscal year 2026 is set at 29.584 trillion yen, exceeding the initial budgeted amount of 28.6471 trillion yen for fiscal year 2025. Concerns over the government's fiscal approach have driven up long-term borrowing costs, increasing interest payment burdens and adding to future fiscal pressures. There are also warnings that swelling debt-servicing costs could force cuts in social security, public works, and education spending.

An editorial in a major Japanese newspaper on the 11th pointed out that successive stimulus measures have led to continuously rising government debt, leaving Japan with the worst fiscal health among advanced economies. A supplementary budget for fiscal year 2026 allocates 6.4 trillion yen for strategic and crisis management investments, largely funded by government bonds. Since the current administration took office, growing domestic and international concerns over fiscal deterioration have contributed to rising interest rates and a weaker yen. Lessons from overseas experiences suggest that loss of market confidence in government finances could undermine governance stability.

Separately, a warning was issued by a U.S. financial publication on the 10th, noting that the administration's post-election agenda of tax cuts and fiscal stimulus could have profound global market implications, potentially triggering instability in Japanese government bonds and foreign exchange markets, with ripple effects across the world financial system.