Forbes:

Global debt surged to $338 trillion in the latter half of 2025, according to Forbes, following a $21 trillion increase in the first six months of the year. The Institute of International Finance has identified Japan as a primary concern, citing its debt burden, which represents approximately 260% of its GDP, as a potential source of deepening fiscal strain. This financial pressure is evident in 20-year Japanese Government Bond (JGB) yields, which have traded near their highest levels since 1999. The resurgence of elevated borrowing costs presents a challenge for Japan and constrains the central bank's capacity to implement interest rate increases. Political instability in Japan, triggered by the resignation of Prime Minister Shigeru Ishiba, is anticipated to exacerbate existing fiscal challenges. The Liberal Democratic Party's leadership election on October 4 introduces further uncertainty. To maintain power, the party may need to form a coalition with opposition parties that advocate for tax reductions. This potential reduction in government revenue is alarming to investors, who have driven Japanese yields to 26-year highs, signaling concerns about a further increase in the nation's debt. This debt issue is not limited to Japan. Market speculation suggests that uncontrolled borrowing costs in the U.K. or France could necessitate intervention by the International Monetary Fund. Furthermore, the U.S. national debt has exceeded $37 trillion, highlighting the widespread nature of global debt concerns. Forbes characterizes Japan as an economy reliant on stimulus for growth, drawing a parallel to an athlete dependent on performance-enhancing drugs. This dependence creates significant obstacles to achieving sustained economic stability and long-term growth, as the effectiveness of stimulus measures diminishes over time and requires increasingly larger interventions.