Currently Japan is the largest net issuer of sovereign bonds in the world. Aspects of managing the debt are the topic of this chapter. In particular, the focus is on the issue of possible variations in future interest payments. Because the amount of the central government public debt outstanding is close to 100 per cent of GDP in the fiscal year 2004, even a small increase in interest rates can lead to a considerable impact on interest expenditures. This chapter argues that, given the probability of higher interest rates, the debt structure should be properly managed with due consideration to refinancing and interest rate risk.