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Japan PM pledges to avoid debt funding for temporary tax cuts

In remarks during the European session, Sanae Takaichi said the government will instead scrutinize revenue sources such as foreign reserves and non-tax income.

Reported · Written up by our desk · Major Pairs

Japan Prime Minister Sanae Takaichi said during the European trading session that the government will avoid leaning on debt funding to finance temporary tax cuts, aiming to preserve market trust, according to FXStreet.

She said the government will scrutinize potential revenue sources including tapping foreign reserves and non-tax revenues, as well as spending reforms.

Takaichi also outlined planned tax changes, including returning a levy on food to 8% two years later and cutting sales tax on food to 1% from April 2027.

FXStreet noted that USD/JPY fell after the remarks, though the move appeared tied to a slide in the US Dollar Index, with the pair last trading marginally higher around 163.47.

Latest closeUSD/JPY 163.42 ▼0.2%|Dollar index 100.80 ▼0.6%

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