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, and is the highest of any developed nation. 43.3% of this debt is held by the Bank of Japan.

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. In response, the Bank of Japan set out in the early 2000s to encourage economic growth through the non-traditional policy of quantitative easing. 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.

The public debt of Japan has continued to rise in response to a number of challenges, including but not limited to the Great Recession in 2008, the Tōhoku earthquake and tsunami and Fukushima nuclear disaster in 2011, and the COVID-19 pandemic in between January 2020 and October 2021, (which also held ramifications for Tokyo's hosting of the 2020 Summer Olympics). 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 2008-09 global recession and the Tohoku earthquake and tsunami in March 2011 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 the tragic earthquake and the related reconstruction efforts." Former Prime Minister Naoto Kan called the situation "urgent" due to the ballooning debt.