Japan’s government debt burden rising

Japan's government debt has been rising sharply for a long period due to declining nominal GDP, lower government revenue, increasing fiscal stimulus and automatic stabilisers. 

"Although we do not see an immediate default risk, we believe the government needs to address the issue early rather than later", says Standard Chartered. 

Investors are more concerned about default risk, whereas the Japanese are more worried about the sustainability of adequate retirement pensions. 

Social security spending accounted for more than 50% of the government's total general expenditure in FY14. Public health insurance premiums accounted for 70% of total social security spending. An  annual increase of one million older people would aggravate the government's debt burden, especially amid anaemic economic growth, notes Standard Chartered.