Japan to Set FY26 Provisional Rate at 17-Year High, Yomiuri Says
Japan's Finance Ministry is planning to set the provisional rate for interest payments on government bonds at 2.6% for the next fiscal year, 2026, according to a report by Yomiuri. This rate would be the highest level in 17 years, reflecting the rising costs of servicing the country's massive public debt. The decision comes amid concerns about the impact of higher interest rates on Japan's already fragile fiscal situation. Japan has the highest debt-to-GDP ratio among developed countries, and the government has been struggling to rein in its spending and reduce the deficit. The higher provisional rate is likely to put additional pressure on the government's budget, as it will increase the cost of servicing its debt. This could potentially lead to cuts in other areas of government spending or the need to raise taxes to offset the increased interest payments.
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