Japan's Takaichi says national debt is still high, rejects "irresponsible bond issuance"

Japan's Debt Level and Market Implications

Takaichi has emphasized Japan's high national debt, rejecting notions of irresponsible bond issuance or tax cuts as a means to stabilize the market. Following the enactment of an ¥18 trillion supplementary budget for this fiscal year, her government is set to push forward with a ¥122 trillion budget for next year. Despite some market improvement today, concerns linger due to persistent selling of Japanese government bonds (JGB) and the weakening yen. USD/JPY is currently down 0.6% at 156.07, while the 10-year JGB yield has decreased by 3 basis points to 2.04%, from a high of 2.10% yesterday. Buyers are attempting to maintain position near the 200-hour moving average, reinforcing upside momentum from a recent bounce. Takaichi's remarks are crucial for maintaining investor confidence, but they also raise questions about the sustainability of Japan's fiscal strategy.