Posts Tagged national debt

Japanese national debt: 7 million yen per person! 「国の借金」最大の943兆円 6月末、1人あたり738万円  :日本経済新聞

The Japanese-language Nikkei (Nihon Keizai Shinbun) reports that the national debt was calculated at the end of June as being 943 trillion yen! Using the July 1st estimate of the Japanese population as being 127,920,000, that works out at 7,380,000 yen per head. Great. (See also earlier post on recent Japanese bond auction).

財務省は10日、国債と借入金、政府短期証券を合計した「国の借金」の総額が2011年6月末時点で943兆8096億円に達したと発表した。2010年3月末時点と比べて19兆4500億円増え、過去最大を更新した。長期国債を中心に普通国債の発行が増えたほか、政府短期証券の発行増なども影響した。

総務省発表の7月1日時点の人口推計(概算値で1億2792万人)をもとに計算すると、1人当たりの借金は約738万円となる。

via 「国の借金」最大の943兆円 6月末、1人あたり738万円  :日本経済新聞.

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Mish’s Global Economic Trend Analysis: Worst Demand on Record for Japanese 40-Year Bonds; Can Japan Service its Debt? How?

Mish quotes Bloomberg (the link is broken)

The 400 billion yen $5.2 billion sale drew bids valued at 2.03 times the amount on offer, the weakest since the Ministry of Finance began selling the securities in 2007.

The yield on the 2.2 percent bond maturing in March 2051 jumped 15 basis points to 2.335 percent as of 5:07 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker.

Japan’s Ministry of Finance said that every 1 percentage- point increase in 10-year yields above 2 percent would add 1 trillion yen in debt-servicing costs to a projection of 22.9 trillion yen for the fiscal year starting April 2012. The nation’s total debt may reach 219 percent of gross domestic product next year, according to the Organization for Economic Cooperation and Development.

via Mish’s Global Economic Trend Analysis: Worst Demand on Record for Japanese 40-Year Bonds; Can Japan Service its Debt? How?.

Mish comments:

nearly all of that demand is internal.

Internal demand is a double-edged sword. Right now it is still sufficient. However, when (not if), Japan ever needs foreign buyers for its bond market, rates will not be 2.3% on 40-year bonds.

Here is the key: If Japan does not maintain a trade surplus covering both interest on its national debt and bond redemptions, all hell will break loose. This gives rise to the question as to how long Japan’s vaunted export machine can remain intact. I do not have the answer to that question, but China and the rest of Asia are nibbling away bits and pieces now. The tsunami sure did not help.

It is mathematically impossible for every country to maintain a trade surplus, yet every country wants to do just that.

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