plans

Feb. 3 (UPI) — Spain announced it will ban social media for children younger than 16 and introduce measures that hold platforms and people accountable.

Spanish Prime Minister Pedro Sanchez spoke at the World Government Summit in Dubai, United Arab Emirates, and denounced social media companies’ misconduct. He said access for young teens will end next week as part of five new government measures against the platforms.

“Social media has become a failed state, a place where laws are ignored, and crime is endured, where disinformation is worth more than truth, and half of users suffer hate speech,” Sanchez said. “A failed state in which algorithms distort the public conversation and our data and image are defied and sold.”

He said, “platforms will be required to implement effective age-verification systems — not just checkboxes, but real barriers that work.”

“Today, our children are exposed to a space they were never meant to navigate alone: a space of addiction, abuse, pornography, manipulation and violence. We will no longer accept that. We will protect them from the digital wild west,” Sanchez said.

The first country to ban young teens from social media was Australia, which implemented its new law in December. There is also a measure in the French National Assembly to do the same. Greece, Denmark, Ireland and Great Britain are considering similar laws.

Spain hasn’t said which platforms will be subject to the new law. But during his speech, Sanchez criticized TikTok, X and Instagram.

Spain’s other measures include developing a “hate and polarization footprint,” which would track and quantify how platforms create division and magnify hate. Sanchez said the government will also hold social media executives criminally liable for failure to remove illegal or hateful content.

“We will turn algorithmic manipulation and amplification of illegal content into a new criminal offense,” he said in Dubai. “Spreading hate must come at a cost.”

Musk says solar powered and space-based data centres are the only way to meet AI’s burgeoning energy demands.

Elon Musk’s SpaceX has acquired his AI company xAI as part of an ambitious scheme to build space-based data centres to power the future of artificial intelligence.

The billionaire, who is also the CEO of Tesla, announced the merger in a statement on Tuesday on the SpaceX website.

Musk said the merger will help to address the emerging question of how to meet the power-hungry demands of artificial intelligence.

AI demand will require “immense amounts of power and cooling” that are not sustainable on Earth without “imposing hardship on communities and the environment,” he said.

Space-based data centres that harness the power of the Sun are the only long-term solution, according to Musk.

“In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilisation currently uses!” he wrote.

“The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space,” he continued, predicting that within the next “2 to 3 years, the lowest cost way to generate AI compute will be in space”.

The merger of SpaceX and xAI will bring several of Musk’s space, artificial intelligence, internet, and social media projects under one roof.

SpaceX operates the Falcon and Starship rocket programmes, while xAI is best known for developing the AI-powered Grok chatbot. Last year, xAI also acquired X, the social media platform known as Twitter, until it was bought by Musk in late 2022.

Both companies have major contracts with US government agencies such as NASA and the Department of Defense .

SpaceX’s Starshield unit specifically collaborates with government entities, including military and intelligence agencies.

Musk is not the only tech CEO looking to space as a solution to AI’s energy quandary.

Jeff Bezos’s Blue Origin and Google’s Project Suncatcher are both working on solar-powered space-based data centres.

“In the history of spaceflight, there has never been a vehicle capable of launching the megatons of mass that space-based data centres or permanent bases on the Moon and cities on Mars require,” Musk wrote.

Musk also said his long-term plan for SpaceX is to launch a million satellites.

To achieve this aim, SpaceX’s Starship rocket programme aims to one day launch one flight per hour with a 200-tonne payload, he said.

Musk said Starlink, a subsidiary of SpaceX that offers satellite-based internet service, will soon get a major boost with the launch of SpaceX’s next generation of V3 satellites.

They will each add “more than 20 times the capacity to the constellation as the current Falcon launches of the V2 Starlink satellites”, he wrote.

Jan. 31 (UPI) — The Iranian military intends to conduct two days of live-fire naval drills in the Strait of Hormuz, starting on Sunday, despite warnings against it from the U.S. military.

Iran’s Islamic Revolutionary Guard Corps is conducting the drills amid civic unrest and U.S. President Donald Trump deploying a “massive armada” to the area, led by the aircraft carrier USS Abraham Lincoln.

“U.S. forces acknowledge Iran’s right to operate professionally in international airspace and waters. Any unsafe and unprofessional behavior near U.S. forces, regional partners or commercial vessels increases risks of collision, escalation, and destabilization,” CENTCOM officials said in a statement on Saturday.

“CENTCOM will ensure the safety of U.S. personnel, ships, and aircraft operating in the Middle East. We will not tolerate unsafe IRGC actions, including overflight of U.S. military vessels engaged in flight operations, low-altitude or armed overflight of U.S. military assets when intentions are unclear, high-speed boat approaches on a collision course with U.S. military vessels, or weapons trained at U.S. forces,” CENTCOM said.

The Strait of Hormuz connects the Gulf of Oman and the Persian Gulf, with Iran situated along its northern shore and Oman and the United Arab Emirates along its southern shoreline.

More than 100 merchant vessels per day sail through the strait, which makes it an “essential trade corridor” that supports the region’s economy, CENTCOM said, as reported by Fox News.

The deployment comes as the Trump administration considers potential military intervention in the Iranian unrest.

Various estimates place the number of protestors and other civilians killed at between 6,000 and more than 30,000 since protests began on Dec. 28.

Saudi Defense Minister Prince Khalid bin Salman attended a private briefing in Washington, D.C., on Friday and warned that Iran would grow stronger if the United States does not act in Iran is warranted if military action is warranted, Axios reported.

Trump has threatened to target Iran’s leadership with military strikes if widespread killings of protesters continued, but he delayed any strikes after Saudi leaders cautioned against it.

Salman’s comments on Friday indicate a change among Saudi Arabia’s leadership regarding potential military action in Iran.

Meanwhile, Iranian Foreign Minister Abbas Araghchi on Saturday accused the U.S. military of trying to dictate how the Iranian military conducts “target practice on their own turf.”

“Freedom of navigation and safe passage of commercial vessels in the Strait of Hormuz are of vital importance for Iran, as much as it is for our neighbors,” Araghchi added.

“The presence of outside forces in our region has always caused the exact opposite of what is declared: promoting escalation instead of de-escalation,” he said.

The pending military exercise also is scheduled after Iranian state media reported an explosion damaged a nine-story residential building and killed a young girl and injured 14 in Bandar Abbas, which is an Iranian port city located on the Strait of Hormuz.

Iran’s Fars News Agency denied reports that IRGC Navy leader Brigadier Gen. Alireza Tangsiri died in the blast, which local officials said likely was caused by a gas leak.

“The initial cause of the building accident in Bandar Abbas was a gas leak and buildup, leading to an explosion,” Bandar Abbas Fire Chief Mohammad Amin Lyaghat told Iranian state media. He called the explanation an “initial theory.”

While diplomatic circles welcome the recovery of the last Israeli captive’s remains in Gaza and the imminent partial reopening of the enclave’s Rafah border crossing with Egypt, a quieter, darker reality is taking shape on the ground.

According to comments by retired Israeli General Amir Avivi, who still advises the military, Israel has cleared land in Rafah, an area in the southern Gaza Strip that it had already flattened in more than two years of its genocidal war, to construct an enormous facility to entrench its military control and presence in Gaza for the long term.

Speaking to the Reuters news agency on Tuesday, Avivi described the project as a “big, organised camp” capable of holding hundreds of thousands of people, stating it would be equipped with “ID checks, including facial recognition”, to track every Palestinian entering or leaving.

Corroborating Avivi’s claims, exclusive analysis by Al Jazeera’s Digital Investigations Team confirms that ground preparations for this project are already well under way.

Satellite imagery captured from December 2 through Monday reveals extensive clearing operations in western Rafah. The analysis identifies an area of about 1.3sq km (half a square mile) that has undergone systematic levelling.

According to the investigation, the operations went beyond mere debris removal and involved the flattening of land previously devastated by Israeli air strikes.

The cleared zone is located adjacent to two Israeli military posts, suggesting the new camp will be under direct and immediate military supervision. The satellite evidence aligns with reports that the facility is to act as a controlled “holding pen” rather than a humanitarian shelter.

The trap of return

To analysts in Gaza, no humanitarian intent is behind this projected high-tech infrastructure, which they say is in fact a trap for Palestinians.

“What they are building is, in reality, a human-sorting mechanism reminiscent of Nazi-era selection points,” Wissam Afifa, a Gaza-based political analyst, told Al Jazeera. “It is a tool for racial filtering and a continuation of the genocide by other means.”

The reopening of the Rafah crossing, tentatively scheduled for Thursday, according to The Jerusalem Post, comes with strict Israeli conditions. Prime Minister Benjamin Netanyahu has insisted on full “security control”.

For Palestinians hoping to return to Gaza, this means submitting to what Afifa describes as “human sorting stations”.

“This mechanism is designed to deter return,” Afifa said. “Palestinians will face interrogation, humiliation and the risk of arrest at these Israeli-run checkpoints just to go home.”

By leveraging facial recognition technology confirmed by Avivi, Israel is creating a high-risk ordeal for returnees, he said. Afifa argued it will force many Palestinians to choose exile over the risk of the “sorting station”, serving Israel’s longstanding goal of depopulating the Strip.

Permanent occupation within the ‘yellow line’

The Rafah camp is just one piece of a larger puzzle. Israel in effect occupies all of Gaza with a physical military presence in 58 percent of the Gaza Strip. Its forces directly occupy an area within the “yellow line”, a self-proclaimed Israeli military buffer zone established by an October ceasefire.

“We are witnessing the re-engineering of Gaza’s geography and demography,” Afifa said. “About 70 percent of the Strip is now under direct Israeli military management.”

This assessment of a permanent foothold is reinforced by Netanyahu’s own remarks to the Knesset on Monday. By declaring that “the next phase is demilitarisation”, or disarming Hamas, rather than reconstruction, Netanyahu signalled that the military occupation has no end date.

“The talk of ‘reconstruction’ starting in Rafah under Israeli security specifications suggests they are building a permanent security infrastructure, not a sovereign Palestinian state,” Afifa added.

A ‘show’ of peace

For the more than two million Palestinians in Gaza, the hope that the return of the last Israeli captive would bring relief has turned into frustration.

“There is a deep sense of betrayal,” Afifa said. “The world celebrated the release of one Israeli body as a triumph while two million Palestinians remain hostages in their own land.”

Afifa warned that the international silence regarding these “sorting stations” risks normalising them. If the Rafah model succeeds, it would transform Gaza from a besieged territory into a high-tech prison where the simple act of travel becomes a tool of subjugation, he said.

“Israel is behaving as if it is staying forever,” Afifa concluded. “And the world is watching the show of peace while the prison walls are being reinforced.”

Many in Hollywood fear Warner Bros. Discovery’s sale will trigger steep job losses — at a time when the industry already has been ravaged by dramatic downsizing and the flight of productions from Los Angeles.

David Ellison‘s Paramount Skydance is seeking to allay some of those concerns by detailing its plans to save $6 billion, including job cuts, should Paramount succeed in its bid to buy the larger Warner Bros. Discovery.

Leaders of the combined company would search for savings by focusing on “duplicative operations across all aspects of the business — specifically back office, finance, corporate, legal, technology, infrastructure and real estate,” Paramount said in documents filed with the Securities & Exchange Commission.

Paramount is locked in an uphill battle to buy the storied studio behind Batman, Harry Potter, Scooby-Doo and “The Big Bang Theory.” The firm’s proposed $108.4-billion deal would include swallowing HBO, HBO Max, CNN, TBS, Food Network and other Warner cable channels.

Warner’s board prefers Netflix’s proposed $82.7-billion deal, and has repeatedly rebuffed the Ellison family’s proposals. That prompted Paramount to turn hostile last month and make its case directly to Warner investors on its website and in regulatory filings.

Shareholders may ultimately decide the winner.

Paramount previously disclosed that it would target $6 billion in synergies. And it has stressed the proposed merger would make Hollywood stronger — not weaker. The firm, however, recently acknowledged that it would shave about 10% from program spending should it succeed in combining Paramount and Warner Bros.

Paramount said the cuts would come from areas other than film and television studio operations.

A film enthusiast and longtime producer, David Ellison has long expressed a desire to grow the combined Paramount Pictures and Warner Bros. slate to more than 30 movies a year. His goal is to keep Paramount Pictures and Warner Bros. stand-alone studios.

This year, Warner Bros. plans to release 17 films. Paramount has said it wants to nearly double its output to 15 movies, which would bring the two-studio total to 32.

“We are very focused on maintaining the creative engines of the combined company,” Paramount said in its marketing materials for investors, which were submitted to the SEC on Monday.

“Our priority is to build a vibrant, healthy business and industry — one that supports Hollywood and creative, benefits consumers, encourages competition, and strengthens the overall job market,” Paramount said.

If the deal goes through, Paramount said that it would become Hollywood’s biggest spender — shelling out about $30 billion a year on programming.

In comparison, Walt Disney Co. has said it plans to spend $24 billion in the current fiscal year.

Paramount also added a dig at Warner management, saying: “We expect to make smarter decisions about licensing across linear networks and streaming.”

Some analysts have wondered whether Paramount would sell one of its most valuable assets — the historic Melrose Avenue movie lot — to raise money to pay down debt that a Warner acquisition would bring.

Paramount is the only major studio to be physically located in Hollywood and its studio lot is one of the company’s crown jewels. That’s where “Sunset Boulevard,” several “Star Trek” movies and parts of “Chinatown” were filmed.

A Paramount spokesperson declined to comment.

Sources close to the company said Paramount would scrutinize the numerous real estate leases in an effort to bring together far-flung teams into a more centralized space.

For example, CBS has much of its administrative offices on Gower in Hollywood, blocks away from the Paramount lot. And HBO maintains its operations in Culver City — miles from Warner’s Burbank lot.

Paramount pushed its deadline to Feb. 20 for Warner investors to tender their shares at $30 a piece.

The tender offer was set to expire last week, but Paramount extended the window after failing to solicit sufficient interest among Warner shareholders.

Some analysts believe Paramount may have to raise its bid to closer to $34 a share to turn heads. Paramount last raised its bid Dec. 4 — hours before the auction closed and Netflix was declared the winner.

Paramount also has filed proxy materials to ask Warner shareholders to reject the Netflix deal at an upcoming stockholder meeting.

Earlier this month, Netflix amended its bid, converting its $27.75-a-share offer to all-cash to defuse some of Paramount’s arguments that it had a stronger bid.

Should Paramount win Warner Bros., it would need to line up $94.65 billion in debt and equity.

Billionaire Larry Ellison has pledged to backstop $40.4 billion for the equity required. Paramount’s proposed financing relies on $24 billion from royal families in Saudi Arabia, Qatar and Abu Dhabi.

The deal would saddle Paramount with more than $60 billion of debt — which Warner board members have argued may be untenable.

“The extraordinary amount of debt financing as well as other terms of the PSKY offer heighten the risk of failure to close,” Warner board members said in a filing earlier this month.

Paramount would also have to absorb Warner’s debt load, which currently tops $30 billion.

Netflix is seeking to buy the Warner Bros. television and movie studios, HBO and HBO Max. It is not interested in Warner’s cable channels, including CNN. Warner wants to spin off its basic cable channels to facilitate the Netflix deal.

Analysts say both deals could face regulatory hurdles.

It’s time to see which Mission League basketball teams are ready for some March Madness in February.

The tournament is set to begin Thursday after Tuesday’s final results clarified seedings.

The final game of the night was Crespi pulling out a 65-61 win over Loyola when Isaiah Barnes scored while falling down with 15 seconds left for the game-clinching basket. Despite the loss, Loyola claimed fourth place in the seedings while finishing in a three-way tie for fourth with Crespi and St. Francis.

The Cubs, though, are 14-14 and will need a win Saturday against the winner of Thursday’s Bishop Alemany (No. 8) vs. St. Francis (No. 5) game to keep alive their Southern Section playoff hopes. You need a .500 or better record to be considered for an at-large berth.

The other Thursday game has No. 7 Chaminade at No. 6 Crespi. That winner will play at Harvard-Westlake on Saturday.

Crespi was led by 6-foot-9 Rodney Mukendi, who scored 17 points. Deuce Newt had 15 points for Loyola.

Harvard-Westlake 90, St. Francis 56: Joe Sterling got back his shooting touch, making seven threes and finishing with 27 points. Amir Jones added 17 points for Harvard-Westlake. St. Francis did not play center Cherif Millogo.

Sherman Oaks Notre Dame 81, Bishop Alemany 48: The Knights claimed second place in the Mission League and an automatic spot for the Southern Section playoffs. Zach White had 26 points and 10 rebounds. Notre Dame played without NaVorro Bowman.

Sierra Canyon 79, Chaminade 28: Brandon McCoy had 18 points and Maxi Adams added 17 points for the Mission League regular-season champions.

Crean Lutheran 76, La Habra 67: The Saints took over first place in the Crestview League.

Mira Costa 53, Peninsula 41: Logan Dugdale has 17 points and 10 rebounds for Mira Costa (23-4).

As the Canadian military assesses how it would best deal with a potential invasion from Russia, Ottawa is pushing ahead with plans to significantly bolster its armored forces. On the wish-list are more than 250 armored fighting vehicles (AFVs), as well as an upgrade for the Canadian Armed Forces’ existing Leopard 2 main battle tanks (MBTs).

These plans were outlined by representatives of the Canadian Armed Forces speaking at Defense IQ’s International Armored Vehicles conference in England last week, their comments later published by Shephard’s Defense Insight. Events of this kind are typically conducted under Chatham House rules, meaning that information can be freely shared with the public, but the identity of the speakers cannot be disclosed.

Canada already had a plan in place to introduce new AFVs, although the timeline for this has been brought forward. At one point, the new vehicles were expected to be inducted in 2035, but, in a reflection of the new urgency for defense modernization, they are now required to be fielded between 2029 and 2031.

This also appears to be the first time that the number of new AFVs has been officially pitched at 250.

The AFVs are required for the Canadian Army’s armored cavalry forces, specifically the two new medium cavalry (MEDCAV) battalions that are planned to be fielded by the future Maneuver Division.

The vehicles will require both a high level of tactical mobility as well as STANAG Level 6 blast protection, officials say. Level 6 constitutes protection against, for example, 30mm automatic cannonfire, or the detonation of a 15mm artillery shell at 10 meters (33 feet).

According to Shephard, the AFVs are also needed in a highly modular configuration, allowing the fleet to be equipped with cannons and/or mortars for direct fire, as well as for launching loitering munitions. Other versions will be configured as munitions carriers or for command and control (C2) operations.

In the past, three vehicles had been identified as meeting the AFV requirement: the Anglo-Swedish BAE Systems CV90, the South Korean Hanwha Redback, and the German Rheinmetall Lynx. Potentially, many other types could also be considered.

It’s not clear to what degree the new AFVs might be expected to have special modifications for the region in which they will chiefly operate. It is notable that Russia is well-trained for fighting in northern latitudes and is introducing a variety of weapons systems that are optimized for this kind of environment. In contrast, meanwhile, the U.S. Army is only slowly returning to more robust preparations for warfare in Arctic conditions.

Currently, the Canadian Army’s tracked AFV fleet is dominated by variants of the Tracked Light Armored Vehicle (TLAV), which is a derivative of the Cold War-era M113. The service also operates more modern wheeled AFVs, including the Bison (a Canadian version of the LAV II used by the U.S. Marine Corps), the improved LAV 6.0, and the Coyote (a version of the Bison configured for battlefield reconnaissance).

A tracked AFV will ensure the MEDCAV battalions have the requisite off-road mobility and ability to negotiate challenging obstacles, especially vital in the Canadian North. Tracked vehicles are also better able to keep pace with tanks.

As for the Canadian Army’s MBT fleet, this is also slated for an upgrade.

Under the Heavy Direct Fire Modernization (HDFM) project, Ottawa wants to bring its current fleet of German-made Leopard 2A6 MBTs to a new standard, known as Leopard 2A6M, by 2033.

Overall, the country now has a force of 103 Leopard 2A4, 2A4M, and 2A6M vehicles, which are being supported under a contract awarded in 2024. The last of these vehicles is expected to be withdrawn from operational service in 2035. Meanwhile, the oldest Leopard 2A4 versions are only used for training. Canada also donated eight Leopard 2s to Ukraine in 2023.

HDFM replaces most of the remaining analog systems in the Leopard 2A6M fleet and modernizes existing systems, including the optics and fire-control system. The result brings the 2A6M in line with the more advanced Leopard 2A4M fleet.

Canadian Army – Leopard 2A4M CAN Main Battle Tanks Live Firing + On The Move [720p]

The HDFM upgrade is only a stopgap, however, before Canada selects a new MBT. At the International Armored Vehicles conference, officials confirmed that Canada plans to “identify and begin procurement” of a new MBT by 2030. It’s also envisaged that, before the last of the Leopard 2s are retired, these older tanks and the new MBT will serve together within additional armored battalions and companies. The Canadian Forces want these units to be operational by 2037.

“The force design may require additional armored or armored cavalry battalions, but it is just too early at this point to say how many,” one source stated at the conference, as reported by Shephard.

This is part of a wider rethinking of the military, with the aim of having a warfighting concept for 2040.

“We recognize that the army we have is not the army we need, and we are taking the necessary funded steps to bridge that gap,” the source continued. “We are changing our structure, we are modernizing our fleet, we are growing our armored capability. We are no longer just talking about the future; we are actively building it.”

Against this force-structure planning and decisions over new fighting vehicles, Canada is increasingly looking at the kinds of land warfare scenarios it might face in the future.

Earlier this month, TWZ spoke to the operational commander for the Canadian North American Aerospace Defense Command (NORAD) about how the Royal Canadian Air Force is looking to counter the growing threats China and Russia pose to the High North.

Simply put, the vast swaths of the Arctic are increasingly of both strategic and economic interest for all the major global powers, and this has been underscored by the growing intensity of Russian and Chinese military and civilian maritime activity in the region.

These same potential threats are also driving a reconfiguration of the Canadian Army.

Remarkably, however, the Canadian Armed Forces are reportedly also now looking at how they would respond to a hypothetical U.S. military invasion of Canada. Officials have stressed that they don’t think it is likely that U.S. President Donald Trump would order an invasion of Canada, and that the war-gamed scenarios were entirely conceptual in nature.

Interestingly, these concepts reportedly involve the Canadian Armed Forces adopting asymmetric tactics, “similar to those employed against Russia and later U.S.-led forces in Afghanistan,” according to two senior Canadian government officials, who spoke to The Globe and Mail on condition of anonymity.

The same newspaper suggests that this war-gaming is the first time in a century that the Canadian Armed Forces have looked at a hypothetical American assault on the country, which is not only a founding member of NATO but also, under NORAD, a close partner with the U.S. military in continental air defense. Canada is expected to be part of the Trump administration’s forthcoming Golden Dome missile defense system.

Undoubtedly, however, relations between Canada and the United States have cooled dramatically in recent years.

While officials in the Trump administration have hammered home their goal of U.S. regional dominance as an overarching geostrategic objective, the president himself has made threats to annex Canada. Last year, Trump said that the border between the two countries was no more than an “artificially drawn line” and one that might be redrawn using force and persuasion.

Last week, Trump posted an altered image on his social media account that placed the American flag over Canada, Greenland, and Venezuela.

“We need Greenland from the standpoint of national security, and Denmark is not going to be able to do it,” Trump told reporters earlier this month.

The ongoing Greenland issue, which has led to considerable consternation in Europe, has also now drawn in Canada.

Reports emerged last week that Canada was considering sending a small contingent of troops to Greenland. Here they would conduct maneuvers alongside eight European countries, part of a military exercise that is seen as a show of solidarity for Denmark, of which the self-ruling island is a territory.

Last week, Trump posted on Truth Social that Canada was opposed to having the Golden Dome over Greenland “even though The Golden Dome would protect Canada. Instead, they voted in favor of doing business with China, who will ‘eat them up’ within the first year!”

Clearly, no one within the Canadian Armed Forces expects to be taking up arms — whether using AFVs or guerrilla tactics — against a U.S. invasion.

However, it is very telling how such a ‘what if?’ is apparently now being considered at a theoretical level. This kind of thinking, as well as the renewed impetus to acquire new and modernized armored fighting vehicles and tanks, underscores just how shifting strategic priorities across the High North are being felt by all of the countries within the region, with Canada no exception.

Contact the author: thomas@thewarzone.com

Japanese Prime Minister Sanae Takaichi’s tax and spending pledges in advance of snap elections next month have sent jitters through global markets.

Japanese government bonds and the yen have been on a rollercoaster since Takaichi unveiled plans to pause the country’s consumption tax if her Liberal Democratic Party wins the February 8 vote.

The market turmoil reflects concerns about the long-term sustainability of Japan’s debt levels, which are the highest among advanced economies.

The volatility has extended beyond Japan, highlighting broader fiscal sustainability worries in an era in which the United States and other major economies are running huge deficits.

What has Takaichi promised on the economy?

Takaichi said last week that she would suspend the country’s 8 percent consumption tax on food and non-alcoholic beverages for two years if her government is returned to power, following her dissolution of the House of Representatives.

Based on Japanese government data, Takaichi’s plan would result in an estimated revenue shortfall of 5 trillion yen ($31.71bn) each year.

Takaichi, a proponent of predecessor Shinzo Abe’s agenda of high public spending and ultra-loose monetary policy, said the shortfall could be made up by reviewing existing expenditures and tax breaks, but did not provide specific details.

Takaichi’s tax pledge comes after her Cabinet in November approved Japan’s largest stimulus since the COVID-19 pandemic.

The package, worth 21.3 trillion yen ($137bn), included one-time cash handouts of 20,000 yen per child for families, subsidies for utility bills amounting to about 7,000 yen per household over a three-month period, and food coupons worth 3,000 yen per person.

Why have Takaichi’s pledges unnerved markets?

Japan’s long-term government bond yields soared following Takaichi’s announcement.

Yields on 40-year bonds rose above 4 percent on Tuesday, the highest on record, as investors exited from Japanese government debt en masse.

Bond markets, through which governments borrow money from investors in exchange for paying out a fixed rate of interest, are closely watched as a gauge of the health of countries’ balance sheets.

While typically offering lower returns than stocks, government bonds are seen as low-risk investments as they have the backing of the state, making them attractive to investors seeking safe places to park their money.

As confidence in a government’s ability to repay its debts declines, bond yields rise as investors seek higher interest payments for holding riskier debt.

“When Prime Minister Takaichi announced a planned reduction in consumption taxes, this made existing bond-holders of Japan’s debt uneasy, requiring a higher compensation for the risk they bear,” Anastassia Fedyk, an assistant professor of finance at the Haas School of Business of the University of California, Berkeley, told Al Jazeera.

“As a result, bond prices dropped and yields rose. And yes, this is a general pattern that applies to other countries, too, though Japan has an especially high level of debt, making its position more vulnerable.”

Japan’s debt-to-GDP ratio already exceeds 230 percent, following decades of deficit spending by governments aiming to reverse the country’s long-term economic stagnation.

The East Asian country’s debt burden stands far above that of peers such as the US, UK and France, whose debt-to-GDP ratios are about 125 percent, 115 percent and 101 percent, respectively.

At the same time, the Bank of Japan (BOJ) has been scaling back bond purchases as part of its move away from decades of ultra-low interest rates, limiting its options for interventions to bring yields down.

“Bond investors reacted because her headline package looks like large, near-term fiscal loosening at exactly the moment the BOJ is trying to normalise policy,” Sayuri Shirai, a professor of economics at Keio University in Tokyo, told Al Jazeera.

How does all this affect the rest of the world?

The sell-off in Japanese bonds reverberated through markets overseas, with yields on 30-year US Treasuries rising to their highest level since September.

As Japanese bond yields rise, local investors are able to earn higher interest payments at home.

That can incentivise investors to offload other bonds, such as US Treasuries.

As of November, Japanese investors held $1.2 trillion in US Treasuries, more than any other foreign group of buyers.

In an interview with Fox News last week, US Treasury Secretary Scott Bessent expressed concern about the impact of Japan’s bond market on US Treasury prices and said he anticipated that his Japanese counterparts would “begin saying the things that will calm the market down.”

Japan’s long-term bond yields fell on Monday amid the expectations that Japanese and US authorities would step in to prop up the yen.

On Friday, The New York Times and The Wall Street Journal reported that the Federal Reserve Bank of New York had inquired about the cost of exchanging the Japanese currency for US dollars.

“Japan matters globally through flows. If Japanese government bond yields rise, Japanese investors can earn more at home, potentially reducing demand for foreign bonds; that can nudge global yields and risk pricing,” Shirai said.

“This is why global-market pieces have framed Japan’s bond move as a wider rates story.”

Higher bond yields in Japan, the US and elsewhere raise the cost of borrowing and servicing the national debt.

In a worst-case scenario, a sharp escalation in interest rates can lead to a country defaulting on its debts.

Masahiko Loo, a fixed income strategist at State Street Investment Management in Tokyo, said that the reaction of international investors to Takaichi’s plans reflects growing sensitivity to fiscal credibility in highly indebted economies.

“Yes, Japan may be the spark, but the warning applies equally to the US and others with large structural deficits,” Loo told Al Jazeera.

Is Japan on the verge of a financial crisis?

Probably not.

While Japan is more indebted than its peers, its fiscal position is more sustainable than it might appear due to factors specific to the country – at least in the short to medium term – according to economists.

The vast majority of Japan’s debt is held by local institutions and denominated in yen, reducing the likelihood of a panic induced by foreign investors, while interest rates are far lower than in other economies.

“The debt situation is more manageable than a lot of people think,” Thomas Mathews, head of markets for Asia Pacific at Capital Economics, told Al Jazeera.

“Net debt-to-GDP is on a downward trajectory, and Japan’s budget deficit isn’t all that big by global standards.”

Loo of State Street Investment Management said that the turmoil surrounding Japan had more to do with a “communication gap around fiscal sustainability and policy coordination” than the country’s solvency.

“That said, markets are likely to continue testing the feasibility of the agenda, as even fiscally sanguine countries have, at times, been disciplined by market forces,” Loo said.