Reports say that right- and left-wing populists in the French presidential election are explicitly pledging fiscal consolidation and warn that they are wary of the market's reaction. In Japan, meanwhile, some observers believe Prime Minister Takaichi Sanae's (高市早苗) fiscal expansion will affect long-term interest rates and fiscal management.
Le Pen is reportedly campaigning on fiscal consolidation in the presidential election and has cited two politicians as models. The article says she looks to Italy's Prime Minister Giorgia Meloni as an example and cites Japan's Prime Minister Takaichi Sanae (高市早苗) as a point of comparison. Prime Minister Takaichi (高市) is seen as likely to adopt a more expansionary fiscal stance after taking office, while also being noted for putting a hawkish stance at the forefront.
As a result, Japan's long-term interest rates have breached 3% for the first time in 30 years, while outstanding public debt has reached more than 200% of nominal GDP. Going forward, there are concerns that interest expense will surge, making fiscal policy management more difficult. The article also points to potential intergenerational effects on the Takaichi administration's fiscal management.