Yet economists at the Federal Reserve Bank of St. Louis point out, opens new tab that this ratio provides little insight into debt sustainability. It is important to look at the public sector’s balance sheet in its entirety. The Japanese state is asset-rich. Many of its liabilities are held by state institutions. The Bank of Japan owns domestic government bonds equivalent to around 100% of GDP. It also owns around 7% of Tokyo-listed stocks, as well as many foreign securities.

This means Japan’s consolidated net liabilities in late 2022 amounted to 119% of GDP, according to the St. Louis Fed, less than half the gross figure. On this basis, Japan has the same level of indebtedness as the United States.

https://www.reuters.com/breakingviews/japan-has-ways-avoid-sovereign-debt-crunch-2024-06-07/

(http://www.autoadmit.com/thread.php?thread_id=5629438&forum_id=2\u0026mark_id=5310690",#48305256)