PM Takaichi’s Tax Gamble.

Japan is in the final days of a heated campaign ahead of the February 8 snap election. Prime Minister Sanae Takaichi, the country’s first female leader, has staked her political future on a bold and controversial economic promise. Takaichi has pledged to suspend the 8% consumption tax on food and non-alcoholic beverages for two years if her Liberal Democratic Party wins. The move has sent shockwaves through global markets. Critics warn of a 5 trillion yen annual revenue shortfall, leading to a rollercoaster in Japanese government bonds and a weakening yen. This election is seen as a referendum on Takaichi-nomics—a revival of high public spending and loose monetary policy aimed at shielding households from persistent inflation.

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