Japan’s market just took a hit, dropping close to 2.5%. Investors are clearly on edge about the government’s relentless deficit spending and whether its finances can hold up now that the Bank of Japan is stepping back from years of easy money.
Adding to the pressure, the BOJ signaled plans to offload about ¥330 billion of ETFs per year. While that pace is smaller than some economists projected, it underscores that the central bank is no longer the steady buyer of equities it once was, removing another layer of support at a fragile moment.Debt has piled up to more than 250% of GDP, and with inflation back in the picture and the BOJ hinting at rate hikes, yields have surged, putting even more pressure on both government budgets and market sentiment. The selloff is a reflection of those deeper structural risks, aging demographics, ballooning interest costs, and limited room to maneuver on fiscal policy.It’s also a flashing red light for the U.S., where debt has already crossed $37 trillion and interest costs are exploding. If policymakers don’t get serious about deficits, the U.S. could face its own spike in yields and volatility. Japan’s experience shows how quickly confidence can unravel when fiscal reform is delayed, and how higher borrowing costs and tighter financial conditions can turn into a drag on long-term growth.Source: StockMarket.News
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