Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com -- Japan’s banking lobby chief warned Thursday that the country must be cautious about the risk of a credit rating downgrade if public debt expansion becomes uncontrolled, as lawmakers increase calls for significant spending ahead of Sunday’s upper house election.
Japanese government bond yields climbed to multi-decade highs this week as markets anticipate that opposition parties advocating for substantial spending and tax cuts could gain ground, potentially increasing Japan’s already massive debt burden.
Junichi Hanzawa, chairman of the Japanese Bankers Association, stated that recent bond yield increases likely reflect investor concerns about market outlook.
"If debt expansion runs out of control, it could become difficult for the government to smoothly sell bonds in the market" given Japan’s already extremely high public debt balance, Hanzawa said at a news conference.
"If this happens, we must be mindful of the risk of a JGB credit rating downgrade," he added.
Recent media polls suggest Prime Minister Shigeru Ishiba’s ruling coalition might lose its upper house majority in the election.
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