Uncle Sam’s biggest creditor faces a fiscal crisis ‘worse than Greece’ as its borrowing costs hit 20-year high 

• The Japanese Prime Minister warned members of parliament The country cannot withstand any tax discounts funded by issuing new debts as the incentive calls grow before the July elections to the House of Representatives. The country has $ 1.13 trillion of US Treasury debts, even as the debt rate to the GDP increased by approximately 250 %.

Japan, the largest foreign financier in the US federal government, faces its debt mountain as its economy began to shrink.

Prime Minister Shigro Ishiba, who was elected last year as financial falcon, faces calls for a new incentive before the House of Representatives in July. On Monday, deputies warned that Japan could not bear any tax discounts driven by more borrowing.

He said: “The financial situation of our country is very poor,” worse than Greece. “

The debts suspended already exceeds the size of its GDP by 2.5 times. Experts say that the lower the shrine – in this case, the more the percentage and the lower burden of the nation’s debts.

Unfortunately for Japan, last week it stated that the gross domestic product has shrunk in the past quarter, as investors discuss that the recession is a tangible danger. On Monday, the cost of borrowing increased after its revenues reached its highest level in its bonds for 40 years in the passage of 20 years.

The famous Greece raised the sovereign debt crisis in the euro area about 15 years ago, although the debt rate to GDP was less than 120 %. More importantly, eight out of 10 euros of the debts that issued Greece have been released to foreign bond holders who have no skin in the game and can move their capital elsewhere immediately. (The hedge of the hedge fund Paul Tudor Jones once described this type of scenario as money with “wings on it”. In contrast, Japan managed to issue debts by taking advantage of the tendency of its citizens to savings.

Japan’s holdings of treasury bonds reached $ 1.13 trillion in March

Ishiba’s comments come on Monday as a group of legislators in the American House of Representatives, “The Great and Beautiful Bill” of President Trump, to leave the committee and move forward in the floor vote. It is expected to extend permanently to reduce the signing tax on President Donald Trump for the year 2017, which dates back to sunset at the end of this year, the loss of revenue to the cabinet will add trillion to the budget deficit.

The draft law submitted after Moody’s stripped the United States of the ideal AAA credit rating, citing the increasing financial expectations. The reduction sparked a comprehensive sale of government debt, with the US return for 30 years exceeding 5 %, near its 5.18 % increase from 2007.

The most famous foreign buyer of treasury bonds is the same debt Japan. The latest official data of the United States shows that Japan’s property has risen to $ 1.13 trillion in March – and a quarter of a quarterly GDP – making it easily an external investor in the United States government.

Ishiba has become prime minister by placing itself as a falcon aimed at reducing the violations of “Abenomics”, a government policy of coordinated monetary and financial stimulation. It was called the name of Shinzo Abe, longer than the Prime Minister in Japan, and the Bank of Japan included expanding its public budget to buy government debts and maintain a cover on the return curve.

He sent his election last September for a period of time in Tokyo, wearing the economists “Ishiba shock”. At that time, the markets of Abe, who was assassinated three years ago, expected to escalate to the position and maintain its course.

This story was originally shown on Fortune.com

2025-05-19 16:57:00