When comparing the debt of various governments and taking into consideration the debt-to-GDP ratio, one would rationally assume that Japan would have defaulted on it's sovereign debt by now. The reason is that their debt-to-GDP ratio is one of the highest at a whopping 200%.
But this is another display of non-rational, emotion-driven markets, since it's not the actual ability to repay that matters in the near term -- it's the perception of the ability to repay.
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