JAPANESE Prime Minister Sanae Takaichi announced on Monday that she will instruct her cabinet in January to begin work on establishing a new fiscal target spanning several years, marking a departure from the country’s longstanding focus on annual budgetary goals.
Takaichi emphasised that her administration would not immediately abandon the current primary budget target, which measures the balance of government finances excluding debt-servicing costs and new bond issuance.
“We will check progress in fixing Japan’s finances by looking at its balance in a span of several years,” she told parliament on Friday.
Reuters reported today that the move follows her previous remarks that the government would replace the annual fiscal target with a multi-year framework, effectively diluting Japan’s commitment to short-term fiscal consolidation.
Known as an advocate of higher government spending, Takaichi’s approach signals a significant shift from past administrations that used the annual target to demonstrate Japan’s resolve to manage public finances over the long term. Under a fiscal blueprint unveiled in June, the government had aimed to achieve a primary budget surplus by fiscal 2025–2026.
Takaichi has argued that the current annual primary budget balance is out of sync with global standards and limits Japan’s ability to use fiscal policy to support economic growth. Her administration plans to introduce a spending package targeting rising living costs, investment in growth sectors, and defence.
Japan carries public debt exceeding twice the size of its economy, the highest among major industrialised nations, prompting long-standing debates over the balance between fiscal prudence and growth-oriented spending. - November 10, 2025
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