Sunday, November 13, 2011

Japan's debts to pass 1,000 trillion yen for first time

Japan's sovereign debt is set to surpass 1,000 trillion yen ($12.81 trillion) at the end of this fiscal year.

According to a Finance Ministry estimate, the country's borrowings through the issuance of state bonds and bank loans will total 1,024 trillion yen in March.

That is 28 trillion yen more than the ministry’s initial 995.92 trillion yen forecast for borrowing in fiscal 2011.

Debts incurred because of post-quake reconstruction, currency market interventions and the Fukushima nuclear crisis have all contributed to the increase.

An additional 11.5 trillion yen in state bonds has been earmarked to finance post-quake reconstruction measures in the third supplementary budget. The budget also authorized 15 trillion yen in financial bills to fight the soaring value of the yen.

In addition, the government allocated 3 trillion yen more in grant bonds than initially planned to assist cash-strapped Tokyo Electric Power Co., operator of the Fukushima No. 1 nuclear plant.

The International Monetary Fund has estimated that Japan's total sovereign debt, including social security costs, stood at 1,054 trillion yen (9.8 trillion euros at an exchange rate of 107 yen per euro), or 220 percent of the country's gross domestic product, as of 2010. more