According to local media reports, the Japanese government plans to reduce the consumption tax rate on food and beverages to 1% starting next April for a period of two years. This is one of Prime Minister Sanae Takaichi's signature campaign promises after months of political games. “Asahi Shimbun” quoted several senior government officials on Monday evening as reporting that Takaichi Sanae is expected to instruct the ruling Liberal Democratic Party as early as Thursday to begin drafting the bill needed to implement the measures. Despite this, the move, which is expected to be announced by Sanae Takaichi, is still difficult to answer the question of how the government will raise funds of more than 4 trillion yen per year for this measure. This makes investors continue to pay attention to Japan's fiscal prospects and causes treasury bond yields to continue to face upward pressure. Earlier, the bipartisan group responsible for discussing the measure abandoned efforts to reach a consensus on the proposal on Monday. Members disagree not only on how to raise funds, but also on whether tax cuts should be implemented permanently. Despite this, the government decided to proceed in broad accordance with the plan proposed by the chairman of the group, Itsunori Onodera of the Liberal Democratic Party, in June of this year. His plan is to reduce the food sales tax from the current 8% to 1%, which will be implemented in April; at the same time, cash allowances for eligible households can begin to be paid in the fall of 2027, which will basically offset the remaining 1 percent of the food tax these households need to bear.

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