Looking at those situations from a pessimistic viewpoint, we may face “an interest rate onus”, where the government’s borrowing costs remain higher than the nominal growth rates. The Japanese government has already started taking measures to extend the average maturity of its debts.
We will still have some time before the interest rate onus takes place, and in the meantime the government can make its efforts for fiscal consolidation. E.  Overcoming deflation and the bank’s response  The next topic concerns what policy response the Bank might take when we see the overcoming of deflation start to have an effect on long-term interest rates.