Country risk in Japan is low suggesting a low likelihood that it will be unable and/or unwilling to meet its external debt obligations in a systemic sense. Though individual debtor entities can and do default. Japan’s elevated government debt to GDP ratio, over 250%, remains a key country risk.
Japan is ranked 39th out of a possible 190 on the World Bank’s ease of doing business scorecard, which is below most advanced economies. Paying taxes, protecting minority investors and starting a business and trading across borders are all harder in Japan. The risk of expropriation within Japan is low.
Political risk within Japan is low. Prime Minister Abe has an overwhelming majority in parliament, paving the way for greater economic reformation. Japan scores in the top quartile in all areas of governance but underperforms on measures of voice and accountability.