Japan Is Said to Set Initial FY25 Debt Servicing Rate at 2%

Japan’s Finance Ministry will set a key rate used to calculate the country’s interest payments at 2%, an increase from the current rate, according to people familiar with the matter.

The accumulated interest rate used for calculating Japan’s debt-servicing costs will be set at 2% for the initial budget for the year starting in April 2025, according to the people. In August, when the ministry compiled budget requests from other ministries, the rate was tentatively set at 2.1%, compared with 1.9% for the current fiscal year.