Japanese Media: Debt Servicing Costs to Rise 17% Next Fiscal Year, Hitting Record High

Japanese media reported that the Ministry of Finance expects debt servicing costs for fiscal year 2027 to surge 17.1% to 36.6 trillion yen, the largest increase in nearly 20 years, due to an upward revision of the interest rate assumption to 3.8%; total budget requests for the same period may exceed 130 trillion yen, setting consecutive records. With fiscal expansion, rising interest rates, and high debt levels compounding, Japan's fiscal sustainability faces growing pressure.