Japan’s national debt climbed to a record ¥1,346.6833 trillion at the end of June, underscoring the country’s reliance on borrowing as spending continues to outpace tax revenue. The total, which includes government bonds, borrowings and short-term government securities, increased by ¥2.8407 trillion from the end of March, according to the Finance Ministry as cited by the Nikkei and other media reports on Aug. 11. Chronic revenue shortfalls remain at the center of the buildup, with bond issuance entrenched as a way to fund government expenditures when tax income falls short. Based on population estimates, the debt burden amounts to about ¥10.95 million per person. The figure is expected to rise further, with national debt projected to reach ¥1,492.8 trillion by the end of this year after parliament passed a ¥3.1135 trillion supplementary budget in June. Investors are also monitoring the fiscal impact of tax-cut measures pushed by Prime Minister Sanae Takaichi, including a plan to lower the food consumption tax rate to 1% from 8% for two years starting in April next year and provide subsidies covering the remaining 1%, effectively removing consumers’ tax burden. The tax cut is estimated to require ¥5 trillion in funding. Takaichi has said the government will secure the money without relying on deficit-financing bond issuance, but analysts say that may not be enough to reassure markets. Financial markets remain sensitive to the risk that Japan’s expansionary fiscal policy could lift interest rates, while the Nikkei said confidence will depend on how far the country can restrain additional debt growth as major spending demands, including the consumption tax cut, higher defense spending and measures to address the low birthrate, continue.