Japan's Debt Servicing Costs Soar to Record High

Japan's finance ministry has announced that debt-servicing costs will rise by 17% to a record 36.64 trillion yen ($230 billion) in the next fiscal year.

This increase reflects plans to set the assumed interest rate for calculating debt servicing costs at a 29-year high of 3.8% in its budget request for next fiscal year.

The total value of budget requests from government ministries and agencies for fiscal 2027 is expected to exceed 130 trillion yen, up sharply from about 122 trillion yen in the current fiscal year.

Prime Minister Sanae Takaichi's push for a more expansionary fiscal policy, including a public investment scheme that allows ministries to seek funding without a preset cap, is driving the surge in budget requests.