Japan in the World

Progressive Integration of Fiscal and Monetary Policies General government debt balances and the amounts held by central banks % of nominal GDP 300 250 200 150 100 I Central bank holdings of government debt (Sep. 2020) Actual general government debt balances (2019) - The same for 2020 (Oct. 2020 IMF forecast) I NOMURA Prolongation of significant global monetary easing in an attempt to break free from low growth and low inflation has been combined with the wide-reaching expansion of fiscal policy to deal with the effects of the pandemic, promoting what is effectively an integration of fiscal and monetary policies in each region There are concerns that should a connection be drawn between this integration and a subordination of central banks to fiscal authorities or an implicit loss of political independence, it will bring about a loss of confidence in currency and disrupt global financial markets 50 0 Japan US Germany France Italy Spain Note: Figures for Germany, France, Italy, and Spain are debt holdings for European Central Bank (ECB) policy targets Source: International Monetary Fund (IMF) 6

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