00:00We're talking about responsible, proactive fiscal policy, but the responsible part is crucial.
00:07Our policy is to secure market confidence by ensuring fiscal sustainability,
00:12by steadily reducing the debt-to-GDP ratio.
00:17Japanese Prime Minister Sanae Takaichi speaking after her party's landslide lower house election win.
00:23Let's bring in our Japan politics and economics reporter Sakura Murakami.
00:27Sakura, so the Prime Minister seemed to sort of acknowledge the concerns in the markets about her fiscal plans.
00:33Yeah, definitely.
00:34She said in her press conference yesterday that this was something that she was looking into,
00:39that she had received advice about, especially concerning the tax cut, the sales tax cut on food.
00:47So it seems like she's looking at markets, she's kind of gauging what the response is,
00:52and also trying to build trust there as well.
00:54When can we expect her to act?
00:56Well, she did mention that she wants to compile a report on the possible sales tax cut.
01:03It will be an interim one, but she wants to compile a report by early summer.
01:08So we can probably expect some sort of plan, something there.
01:12She did say that she has to talk to the opposition parties.
01:16She's kind of seeking a sort of consensus broadly in Parliament as well.
01:22So that might take some time, but we'll see something by the early summer.
01:25Do we have any idea of how she plans to fund it?
01:27Because they continue to say they're not issuing new bonds.
01:31Yeah, exactly.
01:31I mean, that's the big question that everyone's wondering about.
01:36And yeah, she's saying they won't be issuing new bonds.
01:39She did mention, and she has mentioned this before, but there'll be overhauling kind of government expenditure,
01:45mainly in subsidies and also tax exemptions.
01:49I think the concern is that she's kind of shown this or said this is an alternative form of funding,
01:55but we don't have any of the details.
01:57We don't really have the numbers and whether that's going to add up to, you know, a 5 trillion yen shortfall a year.
02:04Yeah, more than $230 billion or $320 billion.
02:08Also concerns about Japan's relationship with China.
02:12Take a listen to what the Beijing foreign ministry had to say.
02:17The election is the internal affair of Japan, but this election reflected some deep-seated and structural issues,
02:23as well as certain emerging views, trends, and developments,
02:27which deserve serious examination by people with insights in Japan and the international community.
02:33The lessons of history are still fresh in memory and should not be left behind.
02:37We urge those running the Japanese government to take seriously,
02:40rather than brush aside the concerns of the international community.
02:45What can we expect in this relationship?
02:48Yeah, China has asked for retraction again,
02:53but Takahichi most probably won't do that.
02:57It'll make her look bad.
02:59And the Japanese government's stance is that a retraction isn't necessary.
03:04Japan's position on the matter, especially on Takahichi's comments on Taiwan, hasn't changed.
03:09So this stalemate seems like it's going to continue for a while yet,
03:14but with the huge electoral victory that Takahichi won,
03:18she's going to be around for a while.
03:20So there has to be some sort of off-ramp, possibly in the next year,
03:26maybe we're looking at, you know, and not immediately,
03:29but it's going to, this isn't going, a problem that's going to go away anytime soon.
03:35Yeah, and we're going to be watching that conversation
03:36that Prime Minister Takahichi will have with President Trump very soon as well.
03:39Bloomberg Japan Politics and Economics reporter Sakura Murakami,
03:43as we await that White House visit, also April, on March 19th.
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