A Japanese lawmaker asked Finance Minister Satsuki Katayama whether a proposed food tax cut could conflict with the Bank of Japan (BoJ)’s inflation efforts, Reuters reported Wednesday.
Japan’s Ministry of Finance proposes reducing the consumption tax on eligible food and beverages from 8% to 1% for two years beginning in April 2027. The eligible category excludes alcohol and meals eaten at restaurants. The ministry says the temporary cut is intended to ease household costs, while related payments would target middle- and lower-income workers. It has described the measure as relief across income groups and a bridge until a fuller payment system is in place.
The House of Representatives referred the bill to its Standing Committee on Financial Affairs on Oct. 20. As of Oct. 21, the House status page listed no committee decision or House vote result.
Reuters also reported that Katayama said tax cuts generally stimulate demand and inflation, while the government seeks to expand supply capacity without adding to price pressures. She said she saw no gap between the government’s and the BoJ’s views.
The BoJ set its overnight interest rate target at around 1.25%, effective Sept. 24. In its September decision, the bank cited a risk that underlying inflation could exceed its 2% target and said it would consider further rate increases in response to economic and price developments. Its July outlook projected inflation excluding fresh food at 2.5% in fiscal 2026, 2.4% in fiscal 2027 and 2.0% in fiscal 2028.
The BoJ’s next policy meeting is scheduled for Oct. 29–30. The bank is due to publish The Bank’s View on Oct. 30, with the full outlook text to follow on the next business day.
