Overview

• Ruling coalition proposes one-time cash payments of ¥40,000 for children and resident-tax-exempt adults and ¥20,000 for other adults, while opposition parties call for a temporary zero consumption tax on food to ease household budgets.
• Long-term 10-year Japanese government bond yields have climbed this week as investors worry that fiscal expansion from tax cuts could worsen Japan’s debt outlook.
• Komeito leader Saito warned that unfunded tax-cut promises are boosting borrowing costs and cautioned that higher interest payments could crowd out other government spending.
• Constitutional Democratic Party leader Noda and National Democratic Party’s Tamaki rebutted that their tax-cut plans include specified funding sources and are not directly linked to bond-market fluctuations.
• A recent Mainichi poll found 55% of voters support consumption tax relief compared with 16% who back cash handouts, highlighting public preference for targeted tax cuts.