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JGB 'iron triangle' shows signs of unraveling

TOKYO -- Japan's virtually self-sustained government bond absorption loop shows signs of strain as yields on the bulk of the market turn negative. The main players -- the Ministry of Finance, the Bank of Japan and big domestic banks -- have long managed to work together and forestall Japan's already serious public finances from going bust.

The three have constituted what is known as iron triangle that plugs the national budget's shortfall -- a third of nearly 100 trillion yen ($976 billion) a year. The outstanding debt is projected to reach 838 trillion yen at the end of March 2017, a level likely to keep Japan in the ignoble position of the world's most indebted state in proportion to economic size.

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