Takaichi Weighs Food Tax Cut Ahead of February Election

Japanese Prime Minister Sanae Takaichi is considering pledging to suspend the 8% sales tax on food as part of her campaign for a snap general election next month, according to the Mainichi newspaper. The government and its Liberal Democratic Party are expected to closely assess the potential market fallout before making a decision, as abolishing the levy would result in an estimated annual reduction of JPY 5 trillion in government revenue. Takaichi plans to dissolve parliament and call an early election to secure public support for her expansionary spending agenda, which has already unsettled financial markets. Two LDP lawmakers said the election could be held on Feb. 8. She is also likely to hold a news conference later on Monday to formally announce the dissolution, seeking to capitalise on her administration’s strong approval ratings.