What are zombie companies?
Japan's "zombie" problem has been around for a long time, said William Pesek, author of the book "Japanization: What the World Can Learn from Japan's Lost Decades."
Raising the borrowing cost will put these zombie companies at risk of bankruptcy and bailouts, which could have a broader impact on the economy if there are job losses.
"But the aid program has led to an increase in the number of 'zombie' companies that would otherwise have been unable to continue operating," the report added.
Japan's stock markets have also been testing new highs since 2023, and higher interest rates could halt the bull run.
Persons:
Adam Pretty, William Pesek, we've, Pesek, CNBC's Martin Soong, Warren Buffett's, Warren Buffett, Kazuo Ueda, Ueda
Organizations:
Getty, Bank of Japan, Tide, Asia Times, Japan Times, CNBC, Nikkei
Locations:
TOKYO, JAPAN, Roppongi Hills, Tokyo, Japan, Asia