It feels like the "Japan's bankrupt" story has been running for half a decade and yet their cost of borrowing is still incredibly low. As the FT points out, Greece looks like a model of propriety and thrift compared to Japan but somehow the market's perception of Japan as a haven survives.
It feels a bit like the quiet before the 2007 crisis when banks knew there was a "correction" coming but kept lending and lending to increasingly indebted companies and individuals because they'd always paid their bills (right up until they didn't).
I have yet to hear a sensible scenario in which Japan pays it's debts - but somehow that doesn't seem to matter.
I may be oversimplifying but in honesty, I just don't get it.
It is worthwhile noting that the OECD’s 2015 public debt estimate for Greece stands at 179.9 per cent of GDP. That is bad enough. Yet it pales against Japan’s expected number. The Japanese government is effectively bankrupt whichever way you look at the picture. To step up military spending, boost public works projects and aim for corporate tax cuts under these circumstances amounts to a breach of promise as a provider of public services to the nation. Service providers should always ensure that their finances are intact enough for them to maintain a satisfactory level of delivery