Prime Minister Sanae Takaichi is on the hunt for new tools to help implement her ambitious economic agenda, but shifting the rules to unlock more cash to fund it could bring fresh risks. At stake is Takaichi’s fiscal credibility. She faces a year-end deadline to explain how she intends to pay for initiatives ranging from a two-year sales tax cut on food to a defense buildup and a sweeping investment plan that’s supposed to boost Japan’s economy for years to come.
If she succeeds, Takaichi could manage to cap new government bond issuance, reassuring investors worried about Japan’s already enormous debt burden, while also reinforcing her popularity with voters. Yet some of the cash-gathering methods under consideration would stretch existing safeguards, while others could leave taxpayers shouldering greater risk.
Extract — continue reading at the source.
