Japan is stuck in a no-win situation that could hurt savers, its currency, and its finances all at once — bad news for the country and a warning sign for global markets.

• Japan is buried in debt worth twice the size of its economy, leaving it no easy way out.
• If it keeps interest rates near zero, the yen keeps falling and ordinary savers get poorer every month.
• If it raises rates to save the yen, the huge debt starts costing real interest and the government bleeds money.
• Its attempt to split the difference — nudge rates up while spending heavily to prop up the yen — backfired.
• The yen fell anyway and government bond yields jumped, so both its currency and its debt market cracked at the same time.

Outlook: With no painless option left, expect more instability in the yen and Japanese bonds, and pressure that could spill into global markets.