Prime Minister Takaichi’s Food Tax Cut Risks Inflation‑Driven Fiscal Tightrope for Japan

Risk of a repeat of the UK’s Truss-era shock looms as bond investors watch for fiscal gaps

Japanese Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama participated in a lower‑house budget committee meeting in June. (Photo by Ken Suzuki)

SHIGESABURO OKUMURA

In Tokyo, Prime Minister Sanae Takaichi’s long‑sought reduction of the food consumption tax could satisfy a Liberal Democratic Party campaign pledge. However, economists argue that this measure offers a weak response to inflation and will compel the government to navigate a delicate fiscal tightrope.

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