Japan’s top currency diplomat, Masato Katayama, said rising public debt is a global trend and urged fiscal policies that support economic growth while preserving long-term sustainability. Speaking at a financial forum in Tokyo, Katayama said advanced economies had increased debt after the 2008 financial crash and the COVID-19 pandemic, making strict deficit reduction a less dominant policy priority. Japan’s public debt exceeds 250% of GDP, the highest among advanced economies, while low borrowing costs linked to the Bank of Japan’s ultra-loose monetary policy have allowed the government to maintain stimulus programs. Katayama said spending should be productive, raise potential growth and be supported by structural reforms, while warning that premature austerity can undermine recovery. His remarks come as Japan prepares its next fiscal year budget, with debates over defense spending, social security costs and stimulus measures. The approach could affect investor expectations for yen exchange rates and Japanese government bond yields, while adding to wider IMF and G7 discussions over post-pandemic debt, austerity and stimulus.