Domestic News Flash ·
PM Takaichi formally announces reduction of food consumption tax to 1%
Prime Minister Sanae Takaichi formally announced on the 30th that the consumption tax rate on food will be reduced from 8% to 1% for two years starting in April 2027. She stated that the funding would not rely on deficit-covering bonds, and during the tax reduction period, combined with benefits for low-income earners, the effective burden will be virtually zero. Meanwhile, the death toll from the Kumamoto earthquake has risen to 34, and rescue operations continue in the disaster-stricken areas amid intense heat. In the foreign exchange market, the yen surged sharply, leading to speculation of intervention by the government and the Bank of Japan.
10 sources2 min read
PM Takaichi announces reduction of food consumption tax to 1% for two years starting next April At an extraordinary board meeting of the Liberal Democratic Party on the 30th, the Prime Minister instructed a policy to lower the consumption tax rate on food from the reduced rate of 8% to 1% for two years from April 2027. During the tax reduction period, income-based benefits will be combined to achieve effectively zero burden. Within the LDP, there are concerns about unclear funding sources and fiscal deterioration, and adjustments are expected to be difficult. 1234
Kumamoto earthquake death toll rises to 34, heatstroke alert continues at evacuation centers amid intense heat In the earthquake with a seismic intensity of 7 that occurred on the 28th, the number of deaths in Kumamoto Prefecture increased to 34. Many casualties resulted from an explosion at AEON Mall Kumamoto and the collapse of the Nippon Paper Yatsuhiro Plant. Approximately 9,000 people are taking shelter at evacuation centers. With temperatures forecast to reach 39 degrees Celsius, measures against heatstroke have become urgent, including the Self-Defense Forces bringing in spot coolers. 567
Yen briefly surges to 158 level against dollar, intervention by government and BOJ speculated In the New York foreign exchange market on the 30th, the yen rose sharply against the dollar, briefly reaching the 158 yen level, a yen appreciation level not seen in about two months. Dollar selling accelerated against the backdrop of the Fed's decision to keep interest rates unchanged and a decline in long-term U.S. interest rates. Observers point to the possibility that the government and the Bank of Japan conducted yen-buying intervention. 89
Foreign population increases in all prefectures, number of entrants exceeds record high of 720,000 According to the Basic Resident Register released by the Ministry of Internal Affairs and Communications on the 29th, the foreign population as of January 1, 2026 was 4.03 million, an increase of 9.6% from the previous year. The number of entrants from abroad exceeded a record high of 720,000, with particularly high growth rates in Hokkaido and Okinawa. The increase in entries for work purposes is drawing attention to its impact on Japan's declining population. 10
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