Is Japan's fiscal position really that bad?

Japan is widely known to have the highest gross government debt level relative to the size of its economy in the developed world but some commentators have argued that the net debt picture is much less of a concern. Accounting for the government’s large holdings of financial assets does of course yield a much lower figure for net debt and, if all public assets are taken into account, net debt is actually close to zero. But these modifications need to be treated with caution, and they don’t in any case alter the fact that Japan’s fiscal situation has deteriorated significantly over the past twenty years.