This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations Strong tax revenue base as the economic center of Japan Growth in tax revenue supported by moderate domestic economic growth Fiscal discipline evident in strong record of revenue and expenditure management Continued moderate decrease in debt, led by positive fiscal balance Sovereign rating constrains Japan's local and regional governments (LRGs) Exceptional liquidity as reserves accumulate and debt declines TMG's budget for fiscal 2024 (ending March 31, 2025) is the largest ever on a COVID-19 normalized basis, as it will address priorities such as child rearing and elder care support, urban infrastructure upgrades, and decarbonation. Nevertheless, we anticipate TMG's fiscal surplus after capital accounts will remain
