IMF Working Papers

Japan's Public Sector Balance Sheet

By Yugo Koshima

October 4, 2019

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Yugo Koshima. Japan's Public Sector Balance Sheet, (USA: International Monetary Fund, 2019) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper compiles and reviews the evolution of Japan’s Public Sector Balance Sheet (PSBS). In the past, large crossholdings of assets and liabilities within the public sector played a role in sustaining a high level of public debt and low interest rates. The Fiscal Investment and Loan Fund (FILF) channeled all postal deposits and pension savings to financing of public sector borrowing. After the FILF refrom in 2000, however, the Post Bank and pension funds shifted their assets to the portfolio investments and are seeking to maximize risk-adjusted returns. This has changed the implications of crossholdings for public debt management. In the future, population aging is expected to add more pressures on the PSBS, which already saw a considerable decrease of net worth over the last three decades.

Subject: Debt financing, Economic sectors, Expenditure, Financial sector, Financial statements, Labor, Pension spending, Pensions, Public financial management (PFM), Public sector

Keywords: Asset allocation, FILF financing, FILF reform, FILF system, Financial sector, Financial statements, Fiscal Investment and Loan Fund, Fiscal Risks, Japan, Japanese Government Bonds, Pension fund assets, Pension Reforms, Pension spending, Pensions, Public sector, Public Sector Balance Sheet, Public sector financing, WP

Publication Details

  • Pages:

    41

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2019/212

  • Stock No:

    WPIEA2019212

  • ISBN:

    9781513514529

  • ISSN:

    1018-5941