2026-01-21 01:21:27

Japan's latest parliamentary election has really thrown the competing parties into chaos. Various parties, in their bid for more seats, have pulled out big moves—promising to directly cut the food consumption tax from 8% to 0% if they can expand their parliamentary seats.

It sounds wonderful, but the market was instantly stunned. The yield on Japan's 40-year government bonds temporarily surged to 4%, reflecting investors' concerns about the fiscal pressure that policy changes might bring.

A careful calculation makes it clear why this matter so deeply affects the market's nerves. Taking a three-person household as an example, with monthly food consumption of 100,000 yen (Note: Japan's consumption tax structure is similar to domestic VAT), an 8% consumption tax amounts to 8,000 yen. This amount may seem small, but on a national level, the scale of fiscal expenditure involved is quite significant, and ultimately, this cost has to be covered somewhere.

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GraphGuru

· 16h ago

This is a typical case of making empty promises just to win votes. Who doesn't love hearing about cutting consumption taxes? But how is this calculation done? A 40-year government bond directly hitting 4% is the real market reaction.

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NFTregretter

· 16h ago

Consumption tax cut to 0? Just forget about it. This is not an electoral promise; it's playing with fire. The 40-year government bond yield directly surges to 4%, and the market is panicking. Japan's move is truly outrageous; they really treat tax issues as a game. Thinking back to those "beautiful promises" before, they all ended up in a fiscal black hole. This time, they probably won't escape either. A quick calculation shows that on the surface, they save some consumption tax, but the underlying gap is huge. Who will fill this hole? It's none other than taxpayers and the bond market. Japan's politicians are really good at playing tricks, risking financial stability as a gamble. Let's watch the show, everyone.

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LightningWallet

· 16h ago

Cutting consumption tax sounds great, but who will fill this hole? It's a classic politician's pie-in-the-sky. The yield on government bonds skyrocketed to 4%, and the market has long seen through this trick. If it could work, it would be a miracle. Japan is playing with fire. Using tax cuts as a final move, but in the end, it's the ordinary people who pay the price. Here we go again—promising tax cuts to win votes, then adding other taxes afterward. Same soup, different bowl. Cutting the consumption tax means finding money elsewhere, but this account simply doesn't add up. Japanese politicians really dare to boast—such a big fiscal pressure, yet they dare to cut taxes? Investors wouldn't be calm. This is a typical case of populist politics—short-term appeasement of voters, while the market always bears the long-term cost. 8,000 yen may seem trivial, but when accumulated at the national level, it becomes an astronomical figure. Is this math really that hard? It's called reform in a nice way; in a harsh way, it's election-driven sabotage. The Bank of Japan must be pulling its hair out.

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zkProofInThePudding

· 16h ago

Can't keep pushing anymore, politicians are starting to play with taxes... Cutting to 0? Who will fill the gap? Regarding consumption tax, on the surface, the common people are happy, but in reality, the national debt yield has already soared to 4%, and the market has long been scared stiff. Japan's debt is so heavy yet they keep pushing forward. Is their fiscal policy truly invincible? It's again vote-based economics—promises are easy, paying back is hard. Cutting 8% to 0 sounds great, but this money has to come from somewhere else, feeling like overdrawing the future. People are all the same; everyone wants a free lunch. Politicians promise quickly, but the market reacts even faster... This is the reality. Japan's move this time feels like a gamble on the nation's fate.

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