key takeaways
- Prime Minister Takaichi Sanae and senior members of her government have sought to reassure markets of their commitment to fiscal sustainability as long-term yields have continued to rise.
- There is an imbalance, however, between the government’s key initiatives for curbing spending – which are politically ambitious and could be time consuming – and its major fiscal priorities, which are already being funded starting with the pending supplemental budget.
- Takaichi is also paying a price for her past fiscal dovishness, as her rhetoric means that markets are likely discounting her rhetoric about responsibility.
Japan Foresight 