Japan’s Takaichi says to achieve two-year suspension of 8% tax on food at earliest date possible
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Japan Prime Minister Sanae Takaichi said on Monday that she hopes to achieve a two-year suspension of the 8% tax on food at the earliest date possible and submit relevant legislation in the fiscal 2026 diet. Takaichi further stated that she cannot comment on the market but will closely monitor speculative moves and respond appropriately. Key quotes I would like to achieve two-year suspension of 8 percent tax on food at earliest date possible, submit relevant legislation in fiscal 2026 diet. Not realistic to create sovereign wealth fund combining Bank of Japan’s ETF holdings, pension funds and currency reserves. Risks are high regarding potential sovereign wealth fund from perspectives of securing safety and liquidity needed to achieve purposes of those government assets. Have reviewed how to secure funding for food sales tax. Cannot comment on market but will closely monitor speculative moves and respond appropriately. Market reaction At the time of writing, the USD/JPY pair is trading 1.14% lower on the day at 154.05. Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More…
Filed under: News - @ January 26, 2026 6:26 am