Prime Minister Takaichi Sanae (高市 早苗) made the case for tax cuts in the Diet, arguing that strengthening economic competitiveness is what supports confidence in the yen. She outlined a policy to cap new government bond issuance at around ¥40 trillion and indicated that the Department of Government Efficiency (DOGE) would resume spending reviews.
Prime Minister Takaichi (高市) has promoted aggressive tax cuts as fiscal policy and indicated that the government intends to maintain market confidence in the yen by improving economic growth and international competitiveness. She explained that tax cuts and maintaining confidence in the currency are not contradictory, and again emphasized a policy of balancing fiscal soundness with growth.
The government reaffirmed its policy of capping new government bond issuance at around ¥40 trillion. As part of its efforts to secure funding, it will explore funding from government special funds of around ¥7 trillion and resume spending reviews by DOGE. The need for more than ¥4 trillion in funding, including tax cuts on food consumption, is also recognized as an issue.
As the yen remains at long-term highs and government bond yields continue to rise, the focus is on how the Takaichi administration will maintain fiscal discipline and central bank independence. The market is closely watching the practical outcome of the tax cuts and fiscal reductions.