Japan's debt-to-GDP ratio is the highest in the world at an astonishing 234.9% of GDP. This level of debt would spell disaster for many countries. But Japan is doing just fine, with its creditworthiness in the upper A category. Japan's debt is mostly held in yen, which is itself a leading reserve currency, and owned domestically. Interest rates are very low by global standards, making the liabilities manageable, plus the government has ample foreign reserves and assets.

That said, the long-term sustainability of the debt is being called into question given Japan's rapidly ageing population, which means soaring social costs and a shrinking tax base.

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