Takaichi's food tax cut will leave Japan budget relying on inflation

CommentRepeat of UK's 'Truss shock' a risk with bond investors on lookout for fiscal holesJapanese Prime Minister Sanae Takaichi, center right, and Finance Minister Satsuki Katayama attend a lower house budget committee meeting in June. (Photo by Ken Suzuki)SHIGESABURO OKUMURAAugust 18, 2026 09:34 JSTTOKYO -- The consumption tax cut on food that Japanese Prime Minister Sanae Takaichi has "long hoped for" may fulfill a campaign pledge for her Liberal Democratic Party. But many economists see it as a poor inflation response that will force the government to walk a fiscal tightrope.