...The credit profile of Japan reflects the long-term challenge of maintaining the world's largest sovereign debt burden amid an aging population and very low potential growth. It also incorporates the economy's large scale and diversity, its strong external payments position and the high quality of institutions and governance. Although the government remains publicly committed to medium-term fiscal consolidation, rising social spending amid population aging and near-term inflation, as well as defense needs in the context of geopolitical tensions, have challenged the prospects for significant debt reduction. Nevertheless, large private savings underpin high debt affordability and mitigate refinancing risks. Japan's growth performance surpassed most G-20 economies in 2022, partly driven by the reopening dynamics following the delayed exit from the pandemic, as well as its resilience to the pressures stemming from slowing global economic growth. However, amid the uncertain global economic outlook,...