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Economists say Japanese PM Sanae Takaichi's consumption tax cut plan will likely do little for consumers and may worsen inflation. The move, though politically significant, risks straining the budget and complicating the macroeconomic outlook.
A new opinion poll shows 44% of respondents approve the government's proposal to cut sales tax to 1%, while 23% argue the rate should be reduced to 0%. The survey, conducted by Kyodo News, highlights public division over the optimal tax level.
Japan's Prime Minister announced the government will consider drafting a supplementary budget for fiscal 2026 to address emerging financial needs amid economic challenges. The budget, to be submitted to the Diet, aims to cover new expenditures not accounted for in the initial plan. Analysts expect it to prioritize infrastructure, social security, or business support.
