US, bond market replace spending caps as check on Japan budget

PoliticsTakaichi's effort to grow AI, chips with public spending risks driving up JGB yieldsThe risk of higher long-term bond yields could make Japan more careful about government spending. (Source photos: Nikkei)RIEKO MIKISeptember 1, 2026 00:55 JSTTOKYO -- Japanese Prime Minister Sanae Takaichi's government eliminated spending caps in strategic fields in the fiscal 2027 budget, leaving the bond market and pressure from the U.S. among the few remaining constraints on her efforts to pour money into policy priorities.