Japan's prime minister open to bond issuance to finance consumption-tax cut

In a parliamentary address, Prime Minister Sanae Takaichi indicated that Japan could resort to issuing sovereign bonds to finance a two-year consumption-tax reduction slated to start in April. She stressed that bond issuance would be calibrated to maintain a stable debt-to-GDP ratio, with spending and expenditure reviews underpinning the fiscal plan. The proposed tax cut features an 8% reduction on food levies, intended to cushion households from rising living costs.

Takaichi added that the government aims to boost market trust in the yen by pursuing policies that reinforce the economy. She reaffirmed the commitment to manage the size of annual bond issues responsibly while seeking to fund the tax relief.