Takaichi's economic ambitions meet interest-rate realities and doubts about debt
Japan's interest rates could soon exceed the economic growth rate, and this could, in theory, make it more difficult for the country to contain the national debt and for Prime Minister Sanae Takaichi to aggressively pursue her economic ambitions.Gross domestic product has been growing about 0.5% a year over the past decade and likely grew 1.3% in 2025, according to the OECD. The Bank of Japan's policy rate is currently 0.75%, and the 10-year Japanese government bond is trading at 2.4%, near a 29-year high.“It wouldn’t be surprising if interest rates naturally rise to around 3% by fiscal 2027,” said Saisuke Sakai, a senior economist at Mizuho Research Institute, which operates under Mizuho Bank.
