The news that Japan will soon enjoy its second golf course flotation since 2004 should warm the hearts of bulls. Whether Shinzo Abe’s ascent to prime minister this week should do so is less clear. During the tenure of Junichiro Koizumi, his predecessor, the scourges of bad debt, deflation and abysmal confidence were largely overcome. Unfortunately, in spite of slaying post-bubble Japan’s dragons, Mr Koizumi left behind an elephant in the room: the level of public debt.

This can be exaggerated. Gross public debt is a catastrophic 175 per cent of gross domestic product. But deducting substantial financial assets held by the state, but excluding central bank assets, leaves net debt at 90 per cent of GDP – lower than Italy, a fellow fiscal reprobate. And any government which can borrow 10-year money at a rate of 1.66 per cent cannot be said to face an imminent fiscal crisis. Mr Abe’s new cabinet confirms that he prioritises growth over lower debt. Koji Omi, finance minister, a proponent of higher consumption taxes, has said that this revenue-raising measure is off the agenda until after the July 2007 upper house elections.