Recent academic papers have shown that the Japanese sovereign debt situation is not sustainable. The puzzle is that the bond rate has remained low and stable. Some suggest that the low yield can be explained by domestic residents' willingness to hold Japanese government bonds (JGBs) despite its...

type="main" xml:id="ecop12023-abs-0001" <title type="main">Summary</title> <p>Japan has the highest debt to GDP ratio among advanced countries, and many studies find that the current fiscal regime of Japan is not sustainable. Yet, the Japanese government bond continues to enjoy low and stable interest rates. The most...</p>