KEY TAKEAWAYS
- With the Liberal Democratic Party’s (LDP) formal approval, the Takaichi government has approved a policy of cutting the consumption tax on foodstuffs.
- At every step in the approval process, the proposal faced open opposition from LDP fiscal hawks and opposition parties have promised to fight the plan in the Diet, suggesting that opposition to Prime Minister Takaichi Sanae’s fiscal plans is only growing.
- The intervention with the United States to strengthen the yen may already be backfiring on Takaichi, insofar as it has led to greater domestic and international scrutiny of the impact that the consumption tax cut and other Takaichi policies could have on the yen’s value.