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Japan, a heavily indebted nation, faces an unfolding sovereign debt crisis. With a debt-to-GDP ratio of about 200%, the government routinely spends roughly 25% of its annual budget servicing debt. For years, Japan managed this unsustainable debt with minimal consequences, thanks to ultra-low interest rates and aggressive monetary policies like quantitative easing (QE). Under QE, the Bank of Japan (BOJ) printed money to buy government bonds, keeping yields artificially low and encouraging borrowing and spending.