Prime Minister Sanae Takaichi¡¯s long-term vision for powering Japan¡¯s growth through domestic investment risks becoming a hollow ambition if she fails to address shorter-term angst over the cost of living.
Takaichi has rolled out an unprecedented plan to generate ?370 trillion ($2.3 trillion) of domestic investment over the next 14 years during the first parliamentary session since her landslide election victory. That blueprint, which aims to deliver 3% nominal annual growth, underscores her intentions to use her supermajority in the Lower House of parliament to build a transformative legacy for the nation.
But there¡¯s less clarity on how much the government will need to contribute to support this vision and where that money will come from. The same goes for a likely sales tax cut and increased defense spending. Those questions are feeding into market concerns about the finances of the nation.
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