The writer is a senior fellow at the Brookings Institution, former chief economist at Institute of International Finance and chief FX strategist at Goldman Sachs

Japan has long had an astronomical level of government debt. Yet government bond yields have been low for much of the past decade, which has given rise to the dangerous delusion that all this debt isn’t a problem. Japan’s recently announced fiscal stimulus, which new prime minister Sanae Takaichi hopes will differentiate her from her predecessor, is the latest manifestation of this issue.

Here’s the thing. Japan’s huge debt burden is real. Low interest rates are not. Government bond yields have been kept artificially low by the Bank of Japan, which has prevented yields from rising to market-determined levels through a combination of massive bond buying and its one-time yield curve control programme of capping rates at target levels.