Wry & Dry

Japan's population: down by one million

Of greater long-term concern than facile arguments about Australian housing prices is Japan's declining population.

The most recent census figures show that the population of Japan fell by almost 1,000,000 persons over the past five years.  A falling fertility rate (1.4 per woman, when 2.3 is required for stability) and zero immigration are the problems.  Japan's population is ageing faster than any other nation.


The usual problems of (a) who will pay for the retired people (health care, housing, income, etc) and (b) from where will the needed workers come is horribly compounded by (3) Japan's massive government debt.  Japan has the second highest net government debt to GDP ratio in the world, some 134%.  No prizes for guessing which country has the highest [2].

So a smaller and smaller number of people are going to have to pay off a larger and larger government debt.

Well, almost.  This week, the government of Japan sold 10 year bonds with a negative yield to maturity (-0.024%).  The government is getting paid to borrow.

Nice work, if you can get it.

-       Anthony Starkins

[1]  The movie won seven Oscars, including best picture and best actor (Alec Guinness).

[2]  Greece: 155%.  NB: many say that Japans debt/GDP ratio is 234%.  That figure is the gross debt, i.e. excluding government assets.  Greece's gross debt and net debt are virtually identical.