Overview
- Prime Minister Sanae Takaichi’s cabinet cleared a ¥21.3 trillion ($135 billion) package featuring roughly ¥17.7 trillion in spending, ¥2.7 trillion in tax cuts, energy subsidies, ¥20,000 per child payments, a gasoline tax cut and rice vouchers.
- Finance Minister Satsuki Katayama issued the strongest warning yet on currency moves, saying intervention is possible against disorderly swings, and the dollar eased to around ¥157.3 after her remarks.
- Long-dated JGB yields climbed to multi-decade or record highs, with the 10-year above 1.8% and the 30- and 40-year at records, reflecting mounting concerns over fiscal sustainability.
- BOJ officials signalled readiness to step in if yields spike, as markets weigh potential rate action in the coming months with October core inflation at 3.0% and third-quarter GDP contracting 0.4%.
- The government will fund the measures via a supplementary budget and increased bond issuance, while analysts warn intervention alone may prove ineffective and traders watch the ¥158–¥162 area as a key test.