Japan’s Food Tax Cut Pledge Puts Fiscal Credibility Under Pressure

Tokyo, 6 October 2026 – Prime Minister Sanae Takaichi has pledged to cut Japan’s consumption tax on food and beverages from 8% to 1% for two years without issuing new deficit-financing bonds, placing household relief and fiscal credibility at the centre of the country’s policy debate.

The measure is intended to begin in April and would be paired with cash benefits for low- and middle-income households. Takaichi said funding would be secured without deficit-covering bonds, an assurance aimed at markets concerned about Japan’s already heavy public-debt burden. The government must still pass legislation and explain the revenue and expenditure adjustments that will finance the plan.