Overview
- The Liberal Democratic Party says it will include a pledge to consider a two-year suspension of the 8% consumption tax on food, honoring its agreement with the Japan Innovation Party.
- A new opposition bloc, the Centrist Reform Alliance of the CDPJ and Komeito, is pushing to scrap the food tax permanently and says it will secure funding through a new government fund.
- Prime Minister Sanae Takaichi announced plans to dissolve the lower house on Friday, triggering a snap election campaign centered on cost-of-living relief.
- The 10-year Japanese government bond yield climbed to about 2.215%, the highest since 1999, reflecting worries that tax relief would require more debt issuance.
- Analysts warn a zero food tax could cost roughly 5 trillion yen a year and say the snap election may delay passage of the fiscal 2026 budget, necessitating a stopgap measure.