A Japanese government advisory panel, the Fiscal System Council, has urged authorities to intensify fiscal consolidation efforts. This recommendation comes as the Bank of Japan's (BOJ) monetary tightening policies increase the potential for higher debt-servicing costs for Japan, which is the world's most indebted developed nation.
The council's proposal, submitted to Finance Minister Katsunobu Kato on Tuesday, highlights concerns that the BOJ's interest rate hikes and reduced bond purchases are contributing to a rise in government bond yields, necessitating greater attention to the country's financial stability.