Japan To Miss Fy2025 Budget Surplus

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Japan To Miss Fy2025 Budget Surplus

Japan To Miss Its Fy2025 Budget Surplus Target - Sources

According to sources, there's a risk that Japan will miss its goal of having a budget surplus for FY2025. Why? The government has increased its spending which is now making it difficult to run a budget surplus.

The new estimate, which will be released this week, is expected to beat the government forecast from July. The government had initially planned to deliver a budget surplus starting from April 2025.

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But now, it seems that its not happening anytime soon. Its also important to note that Japan didn't had any budget surplus since the early 2000s.

The debt of Japan is now twice the size of the economy, highlighting the gravity of the core issue. This is happening at a time when BoJ is wrapping up its ultra-loose monetary policy & raising the interest rate from near zero.

But, the government has littlte choice but to let go of the budget surplus target. The coalition government is doing these actions to appease the voters and to increase their chances of wining against the opposition.

The bottom line is that government will have to make a 13.9 trillion Yen worth of extra budget. Most of it will go into spending and will make it nearly impossible to have a budget surplus by April.

In Japan, the primary budget balance is a key measure which shows which policies can be implemented without debt. It doesn't include costs of debt servicing and new bond sales.

But, it will not be the first time that Japan has failed to reach a primary budget surplus. In fact, the governments had to push back the target for a budget surplus several times.

As of now, the exchange rate shows that USD/JPY is trading at 157.85 with 160.00 as immediate resistance. On the way down, the first support is near 157.00 - 157.10.

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