National debt of Japan

As of March 2023, the Japanese public debt is estimated to be approximately 9.2 trillion US Dollars (1.30 quadrillion yen), or 263% of GDP,^[1] and is the highest of any developed nation.^[2][3][4][5] 43.3% of this debt is held by the Bank of Japan.^[6]

Japan's asset price bubble collapse in 1991 led to a prolonged period of economic stagnation described as the 'Lost Decades', with GDP falling significantly in real terms through the 1990s.^[7] In response, the Bank of Japan set out in the early 2000s to encourage economic growth through the non-traditional policy of quantitative easing.^[8][9] By 2013, Japanese public debt exceeded one quadrillion yen (US$10.46 trillion), which was about twice the country's annual gross domestic product at that time, and already the largest debt ratio of any nation.^{[10][11][12][13]}

During the Lost Decades, Japanese public debt has continued to rise in response to a number of challenges, such as the Great Recession in 2008, and as well as two national crises, including the triple disaster (earthquake, tsunami, and nuclear disaster, etc.) in March 2011, and with COVID-19 pandemic and the subsequent recession in between January 2020 and the end of September 2021 in both Heisei and Reiwa periods.

In August 2011, Moody's rating cut Japan's long-term sovereign debt rating by one notch to Aa3 from Aa2 in line with the size of the country's deficit and borrowing level. The large budget deficits and government debt since the global recession of 2008 and triple disaster in 2011, which contributed to the ratings downgrade. In 2012, the Organisation for Economic Co-operation and Development (OECD) Yearbook editorial stated that Japan's "debt rose above 200% of GDP partly as a consequence of triple disaster and the related reconstruction efforts."^[14] Former Prime Minister Naoto Kan called the situation "urgent" due to the ballooning debt.^[15][13]