Japanese Prime Minister Sanae Takaichi has declared her intention to freeze the country’s consumption tax on food products at the earliest opportunity, even as concerns mount over Japan’s fiscal stability against the backdrop of the ongoing Middle East crisis.
Speaking during a parliamentary debate with opposition leaders on Wednesday, Takaichi also pledged that her government would do everything in its power to limit debt issuance while supporting the public — signaling plans to draft a supplementary budget given fears the crisis could deliver a prolonged economic blow.
Her remarks landed as Japanese government bond yields climbed to their highest level in nearly three decades, a move analysts link to growing market expectations of accelerating inflation in resource-scarce Japan and deepening anxiety over the country’s fiscal trajectory.
The session was led for the first time by Democratic Party for the People chief Yuichiro Tamaki, whose party now holds the largest opposition bloc in parliament following the Centrist Reform Alliance’s defeat in February’s election and continued uncertainty over a merger between its two founding parties in the upper house.
Wednesday’s debate — only the second of Takaichi’s premiership — was also the first since November, after a planned April session was scrapped due to scheduling conflicts. It came just hours after the prime minister returned from a bilateral summit with South Korean President Lee Jae Myung in his hometown.
Much of the first half centered on Takaichi’s decision earlier in the week to order a review into formulating a supplementary budget — a notable reversal from her previous position — coming just over a month after Japan passed a record 122.31 trillion yen ($769 billion) budget for fiscal 2026.
On the food tax freeze, Takaichi indicated she hopes to move forward once a cross-party national council on the matter delivers its interim report this summer. However, the proposal is drawing increasing scrutiny. Opposition parties appear to be cooling on the idea, and last week the OECD labeled it “untargeted and costly,” recommending instead that the tax be raised gradually.
Takaichi also said she would “seriously reflect” on suggestions from Tamaki regarding whether the government should consider winding down its fuel subsidies, designed to keep petrol prices below 170 yen per liter. The scheme, relaunched in mid-March, is expected to exhaust its one-trillion-yen allocation by the end of June.
While exchanges with Tamaki — whose party is broadly aligned with Takaichi’s Liberal Democratic Party on fiscal matters — remained largely civil, CRA leader Junya Ogawa struck a sharper tone in his debut appearance, accusing the prime minister of dragging her feet on the supplementary budget decision. Takaichi rejected the criticism, insisting the government had been weighing its options from an early stage.
On the diplomatic front, Takaichi told Constitutional Democratic Party leader Shunichi Mizuoka that she “strongly welcomes” last week’s visit by U.S. President Donald Trump to China, saying dialogue between the two powers helps preserve regional stability. With Japan-China relations still strained following her November remarks — which hinted at a possible Japanese defense role in a Taiwan conflict — Takaichi said she remains “open” to engagement with Beijing and sees value in a measured approach.
The 45-minute session, reflecting the fractured state of Japan’s opposition since the LDP’s sweeping House of Representatives victory, saw Takaichi hold brief exchanges with leaders from six parties. Tamaki received the longest slot at 12 minutes, followed by Komeito’s Toshiko Takeya, Sanseito’s Sohei Kamiya, and Takahiro Anno, leader of the technology-focused Team Mirai, which secured 11 lower house seats at the last election.
Anno closed the session with questions on artificial intelligence policy, drawing laughter from the chamber as he offered to personally tutor the prime minister on the technology.