Japan Finance Minister Katayama: Tax Cuts Won’t Be Funded by Deficit Bonds

The signal here is fiscal credibility rather than any specific tax measure: by ruling out deficit bonds, Katayama is framing tax cuts as revenue-neutral, which matters for JGB holders and for how Japanese rates transmit into global markets. The emphasis on pairing spending and revenue, plus strict scrutiny of next year's budget requests, suggests the constraint is political and procedural, not just arithmetic. Whether that discipline survives actual budget negotiations is the open question.