Fiscal Concerns Remain after Takaichi Vows to Win Market Trust

Tokyo, Oct. 5 (Jiji Press)--Concerns about Japan's fiscal deterioration remain after Prime Minister Sanae Takaichi vowed in a parliamentary policy address Monday to win market trust.

Amid rising bond yields, investors are closely watching whether Takaichi's administration will take concrete action to realize her signature "responsible and proactive" fiscal policy of balancing economic growth and fiscal sustainability, as the government is beginning to compile its initial budget for fiscal 2027.

"We will take a straightforward approach to enhance market confidence," Takaichi said in the policy address at the start of an extraordinary Diet session. She pledged to carefully explain the results of her policies to the public and market participants.

Since her administration was launched last October, financial markets have closely monitored the prime minister's remarks and policy management.

In light of Takaichi's cautious stance toward rate hikes by the Bank of Japan, as well as fears of increased government bond issuance due to her expansionary fiscal policy, the benchmark 10-year government bond yield rose to 3.115 pct on Sept. 25, the highest level since August 1996.

[Copyright The Jiji Press, Ltd.]