The Bank of Japan’s tweak to its yield curve control (YCC) mechanism has created another reason to take a look at the nation’s fiscal condition, with Tokyo seeking to expand spending on defense and child care while shouldering a massive public debt.

BOJ Gov. Kazuo Ueda’s loosening of restraints on 10-year bond yields prompted speculation among some that the end of the YCC program was somewhere on the horizon, and with it the quantitative easing program that allowed the government to grow the national debt to almost 260% of gross domestic product, the most in the developed world. With Tuesday’s move by Fitch Ratings to downgrade U.S. government credit, Japan’s creditworthiness may also come under question if rates rise.

Ueda’s YCC adjustment was "a message to the government that it now will have to do financial management responsibly, because the BOJ won’t control yields as firmly as it used to,” said Takahide Kiuchi, economist at Nomura Research Institute and a former BOJ board member. "Yields will rise if markets lose faith in their management.”