Finance Minister Katayama Strongly Denies Sovereign Default, Citing 'Yen-Denominated, Predominantly Domestically Held' Bonds
In a House of Councillors Budget Committee meeting, Finance Minister Satsuki Katayama clearly stated her view on the possibility of a sovereign default on Japanese government bonds (JGBs), saying, "JGBs are yen-denominated, and the overwhelming majority of holders are domestic. It is normally inconceivable." This remark was made in response to a question from Kokumin Democratic Party's General Affairs Chairman, Yoshifumi Hamano, reiterating the government's official stance on long-standing concerns regarding Japan's fiscal health. Finance Minister Katayama explained that since JGBs are yen-denominated, it is theoretically unlikely for the Japanese government, which can issue its own currency, to be unable to repay its yen-denominated debt. She further emphasized that while advanced countries abroad have about 30% of their government bonds held by foreign investors, Japan's foreign ownership ratio for JGBs remains at around 10%, with domestic financial institut...