Core Viewpoint - The Japanese government has passed a supplementary budget for the fiscal year 2025, which raises concerns about the country's fiscal health due to increased debt issuance to fund a large-scale economic stimulus plan [1][2]. Group 1: Economic Stimulus and Budget - The Japanese cabinet approved an economic stimulus plan amounting to 21.3 trillion yen (approximately 135.4 billion USD) [1]. - The supplementary budget approved by the National Diet totals 18.3 trillion yen, representing a 31.7% increase from the previous year's supplementary budget of 13.9 trillion yen [1]. - Over 60% of the supplementary budget will be financed through new bond issuance, raising concerns about Japan's fiscal situation and increasing debt repayment risks [1]. Group 2: Debt and Interest Rates - Japan's government debt is approximately 2.5 times its GDP, the highest among major economies [2]. - The yield on newly issued 10-year government bonds has risen to 1.975%, the highest level since June 2007, with expectations that it will soon exceed 2% [2]. - Interest payments on Japan's debt are projected to reach about 16.5 trillion yen by 2025, accounting for 1.7% of GDP, which could limit macroeconomic policy space and erode national wealth [2]. Group 3: Future Budget Concerns - The draft budget for fiscal year 2026 is expected to exceed 120 trillion yen, setting a new record for general account expenditures, indicating a trend of fiscal expansion [3]. - The defense budget for 2026 may surpass 9 trillion yen, reflecting Japan's intentions towards re-militarization, which poses risks to regional peace and stability [3]. - A loss of confidence in Japan's economy could lead to significant capital outflows, resulting in increased market volatility [3].

惠誉：日本债务短期风险受控，但长期风险仍然显著。 ...