Japan PM Takaichi: Impact of New Debt to Be Offset by Higher Tax Revenue

FXStreetMay 25, 2026 9:30 AM

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Japan Prime Minister (PM) Sanae Takaichi said during the European trading session on Monday that the potential new debt to compensate for higher household utility and gas bills won’t impact bond markets, as it will be offset higher tax and other revenue sources.

Remarks

To implement support to curb household utility and gas bills from July to September.

Will compile an extra budget of more than 3 trillion Yen.

Will approve electricity and gas subsidy on Tuesday.

Electricity and gas subsidy to cost about 500B yen.

Will issue new deficit financing bonds to finance extra budget. Won't increase bond issuance on a calendar basis.

But will have no impact on the bond market as new debt will be offset by higher tax revenue, others.

Market reaction

No immediate response by the Japanese Yen (JPY) after Japan PM Takaichi's comments. The reasoning behind the JPY remaining unchanged after Takaichi's comments appears to be that government's decision to raise new debt has already been announced last week. As of writing, USD/JPY trades 0.2% higher to near 159.00.

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