Fitch Flags Long-Term Threat in Japan Debt Outlook

Fitch Ratings said Japan’s sovereign debt remains manageable in the short term thanks to a large domestic investor base and continued support from the Bank of Japan, limiting immediate refinancing or liquidity risks. The rating company cautioned, however, that structural factors—chiefly an ageing population, persistent fiscal deficits and higher social-security spending—are likely to push the debt ratio higher again before 2030, posing a significant longer-term challenge to fiscal sustainability. Fitch added that failure to stabilise the public debt burden over the next several years could eventually weigh on Japan’s credit profile, underscoring the need for credible medium-term consolidation measures.