Prime Minister Sanae Takaichi on Friday sought to reassure markets after her expansionary spending plans unsettled investors, pitching what she called a ¡°responsible and proactive¡± fiscal policy that balances capital investment and fiscal restraint.
During campaigning ahead of the Feb. 8 general election, Takaichi pledged to suspend the 8% consumption tax on food for two years without issuing deficit bonds. Still, her pledge sent long-dated Japanese government bond (JGB) yields to record highs as investors feared the government may sell more debt to fund the cut.
¡°I will not pursue reckless fiscal policies that jeopardize market confidence,¡± Takaichi said Friday in her policy speech to parliament ¡ª Japan¡¯s equivalent to the U.S. State of the Union address.
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