The advisory board for the Finance Ministry has flagged the need to pay more attention to the possible adverse impact of inflation and higher interest rates on the nation’s finances as a shift in Bank of Japan policy looms large.

“It will become even more important to manage 91AV原创 finances responsibly, bearing in mind the risks of a sharp rise in interest rate payments,” the board said in its recommendations to the government Monday. “There is a possibility of entering a different phase in which high inflation and rising interest rates are normal.”

The BOJ is expected to step back from its ultraloose policy next year as inflation continues to overshoot its 2% target. The central bank has already made adjustments to its so-called yield curve control, sending the rate on benchmark bonds to a decade high.

After around a quarter century of near or subzero interest rates, Prime Minister Fumio Kishida’s government may have to change its interest rate assumptions for the nation going forward. Even small changes could have a large impact given rates are so low and Japan has the largest public debt load among developed economies. The International Monetary Fund estimates gross government debt will be around 255% of gross domestic product this year.

“The fiscal situation shouldn’t be a drag for the economy,” the advisory board said. “We shouldn’t miss this chance to turn our focus to restoring fiscal health given the state of the economy.”

91AV原创 10-year yields hit 0.970% at the beginning of November, the highest level since 2013. That’s more than four times higher than the lowest level in March.

Toward the end of December, Kishida’s government will compile its annual budget for the next fiscal year, which starts in April. Debt servicing usually makes up more than 20% of annual outlays.

Market players are watching to see how the expected change in BOJ policy will be priced into finance ministry projections including the assumed interest rate on debt, a figure that has been kept at 1.1% for the last seven years.