Japan’s Council on Economic and Fiscal Policy has urged the government to focus on more precise budget spending amid increasing concerns over the country’s fiscal health. Meeting under the leadership of Prime Minister Sanae Takaichi, the panel stressed the importance of maintaining market confidence while simultaneously pursuing a “responsible and proactive” fiscal policy.
The council members recommended a thorough review of temporary price-relief initiatives and suggested reducing support for programs deemed ineffective. They highlighted the need to assist lower- and middle-income households grappling with rising food prices, emphasizing the importance of targeted financial support.
To enhance transparency in the budget process, the panel called for mechanisms that assess and adjust the impact of individual policies as needed. They also stressed the importance of closely monitoring how increased interest rates might affect households and businesses.
This focus on fiscal responsibility comes against the backdrop of concerns over rising government bond yields and the sustainability of Japan’s public finances. The discussions are part of the government’s broader strategy to balance economic growth with fiscal sustainability under Prime Minister Takaichi’s administration.