Published 17 hours ago • loading... • Updated 14 hours ago

Japan PM's tax giveaway roils markets and worries voters

Last week, Prime Minister Sanae Takaichi pledged to exempt food products from an eight percent consumption tax for two years ahead of the February 8 vote.
Markets were already anxious over a $135 billion stimulus package adopted at the end of 2025, and Prime Minister Sanae Takaichi on Monday proposed a public committee to discuss fiscal issues.
The tax break carries an estimated fiscal cost of around 5 trillion yen per year, bond yields on 30- and 40-year Japanese bonds jumped to record highs, and the foreign exchange market pressured the yen amid intervention talk.
According to a Nikkei poll published Monday, 56 percent doubt the tax exemption's impact on prices, yet opposition parties back the measure and a bigger parliamentary majority could empower Takaichi's coalition.
The move evoked fears of a repeat of Britain's 2022 'Truss shock', UBS experts warned yields could rise further, and Marcel Thieliant said `Takaichi may be forced to offset some of the expansionary fiscal measures announced recently with tightening elsewhere`.

Insights by Ground AI

21 Articles

Takaichi's pledge to scrap food tax for 2 years unsettles markets and voters

Ahead of a snap election in Japan, Prime Minister Sanae Takaichi has pledged to scrap a tax on food, but a lack of clear funding is unnerving markets…

14 hours ago·Sakado, Japan

Read Full Article

Daily Journal

+17 Reposted by 17 other sources

Center

Japan PM's tax giveaway roils markets and worries voters

Ahead of a snap election in Japan, Prime Minister Sanae Takaichi has pledged to scrap a tax on food, but a lack of clear funding is unnerving markets and voters.

17 hours ago·Cherokee County, United States

Read Full Article