Japanese Prime Minister Sanae Takaichi reiterated that special deficits will not be relied upon to fill national debt to raise funds for food consumption tax cuts. Her earlier statement sparked speculation in the market, believing that her position had changed. Takaichi Sanae wrote on the X platform that she has not ruled out issuing treasury bonds for the overall national budget, but she will not use special deficits to fill treasury bonds to make up for the tax gap caused by temporary consumption tax cuts. She wrote that the government's position “remains unchanged.” She spoke in the National Assembly earlier on Monday. Some media reports were misinterpreted, so she came forward to clarify her position. At the Senate Budget Committee meeting, when asked about the sources of funding for tax cuts, Takaichi Sanae said that issuing treasury bonds is not ruled out. Sanae Takaichi said, “Regarding the funding sources for the reduction of the consumption tax on food and beverages, we will carefully evaluate the fiscal scale within the broad framework of the budget preparation reform, and achieve a reduction in the debt ratio on the premise of monitoring tax trends and reviewing both ends of income and expenditure at the same time.” She said, “As in the previous fiscal year, we will adopt an initial budget and supplementary budget to reasonably control the total annual treasury bond issuance scale. That doesn't mean we don't issue treasury bonds at all.” The market is paying close attention to how Takaichi Sanae can implement tax reduction policies without further increasing the country's debt burden. The tax reduction plan is expected to cause 5 trillion yen in tax losses each year. The temporary tax relief program began in April and will last for two years.

Japanese Prime Minister Sanae Takaichi reiterated that special deficits will not be relied upon to fill national debt to raise funds for food consumption tax cuts. Her earlier statement sparked speculation in the market, believing that her position had changed. Takaichi Sanae wrote on the X platform that she has not ruled out issuing treasury bonds for the overall national budget, but she will not use special deficits to fill treasury bonds to make up for the tax gap caused by temporary consumption tax cuts. She wrote that the government's position “remains unchanged.” She spoke in the National Assembly earlier on Monday. Some media reports were misinterpreted, so she came forward to clarify her position. At the Senate Budget Committee meeting, when asked about the sources of funding for tax cuts, Takaichi Sanae said that issuing treasury bonds is not ruled out. Sanae Takaichi said, “Regarding the funding sources for the reduction of the consumption tax on food and beverages, we will carefully evaluate the fiscal scale within the broad framework of the budget preparation reform, and achieve a reduction in the debt ratio on the premise of monitoring tax trends and reviewing both ends of income and expenditure at the same time.” She said, “As in the previous fiscal year, we will adopt an initial budget and supplementary budget to reasonably control the total annual treasury bond issuance scale. That doesn't mean we don't issue treasury bonds at all.” The market is paying close attention to how Takaichi Sanae can implement tax reduction policies without further increasing the country's debt burden. The tax reduction plan is expected to cause 5 trillion yen in tax losses each year. The temporary tax relief program began in April and will last for two years.