Japan PM says won't rule out debt issuance to fund tax cut

Japan's Prime Minister Sanae Takaichi has stated on Monday that she will not rule out the possibility of issuing bonds to finance a two-year reduction in the country's consumption tax, set to commence in April of the following year. The government plans to strive for a stable reduction in the debt-to-GDP ratio by evaluating both expenditures and spending, Takaichi informed parliament.

She emphasized that they would control the magnitude of bond issuance annually. Takaichi explicitly mentioned that the government would not completely dismiss the option of issuing bonds to finance the scheduled tax cut. She also highlighted that Japan can bolster market confidence in the yen by taking measures to strengthen the economy.

The government has outlined a plan to reduce an 8% levy on food items from April of the following year, as part of measures to alleviate the financial burden on households due to increasing living costs.