The intention of this paper is not to minimise Japan’s fiscal difficulties, nor is it to argue that Japan should “inflate itself” out of its debt problem. Ongoing budget deficits are very high, and the ageing of the population, and possibly also the needs of the financial sector, are expected to add substantial budgetary strains in the future. As I shall discuss, one could even imagine a situation in which fiscal considerations stand in the way of the Bank of Japan carrying out its desired monetary policy. Rather, this paper is intended to help understand the fiscal implications of the Bank of Japan’s monetary policies and to emphasise that such considerations will be an important part of the economic debate.