Investors are cheering potential temporary sales tax cuts on food if the PM's coalition wins. What are we expecting?
Shery Ahn
Yoshiaki Nohara
The talking point is the food items sales tax. The PM proposed to exclude food from sales tax for two years, but everyone is calling for a tax cut to zero. This raises concerns about Japan's fiscal situation, hence the rise in long-term bond yields.
With the 20-year JGB auction and yen volatility, could this be a political issue for Takaichi?
Avril Hong
Yoshiaki Nohara
The market is sending clear signals: the yen is strengthening a little, but there's consistent upward pressure on long-term yields, especially the 10-year. When they go up, it affects people's livelihoods because it's linked to mortgage rates.
The ruling party has aligned with the main opposition. Does this make things more difficult to predict?
Shery Ahn
Yoshiaki Nohara
Uncertainty is the word. It's very difficult to see the implications of changing coalition partners and how it will affect the election outcome.