Takaichi Tax Cut in August? Behind the Rumor, a Resignation Scenario Brews

Talk in Nagatacho says Prime Minister Takaichi's cherished cut to the consumption tax on food could be 'executed in August.' But the second half of Toyo Keizai's report matters more: as the tax cut advances, a scenario to force Takaichi's resignation is taking shape within her own party, and the drifting Basic Policy document bears the marks of that tug-of-war. For markets this is dual uncertainty—a food tax cut would lower headline inflation short-term while widening the fiscal gap, inviting bond-market scrutiny of funding plans, and any political rupture would put policy continuity itself at risk. With the yen at a 39-year low, Japan's political risk premium for the second half just got another line item. Watch the August Diet calendar and the funding design.