Japan's finance minister, Katayama, used a September 18 post-Cabinet meeting briefing to lay out how the Takaichi government intends to rewrite its budgeting process for the year starting April 2027. He called implementing the "budget drafting reform" from Basic Policy 2026, the framework he proposed at the Council on Economic and Fiscal Policy in June, his most important task.
The concrete steps: stop funding standing programs through supplementary budgets and place permanent measures in the initial budget instead; review tax breaks and subsidies through what Katayama called a "Japan-style DOGE," a nod to the United States' government-efficiency drive; and set the size of annual government bond issuance only after determining a fiscal scale consistent with a steady decline in the debt-to-GDP ratio. Katayama said the ministry will keep explaining that approach to bond investors through direct dialogue with the market rather than announcing issuance totals in advance.
Katayama was also newly named state minister overseeing a bill that would temporarily cut the consumption tax on food and drink and add support payments to offset the burden on workers. He said the government wants the bill through an upcoming extraordinary Diet session, without naming a date. He did not detail how the resulting revenue loss would be covered, saying only that spending and revenue reforms are already under way.
On financial policy, Katayama linked bank lending to the growth strategy, saying the Bank of Japan's lending stance has turned distinctly more active and that the loan-to-deposit ratio at some major regional banks has passed 90 percent, prompting some of those banks to weigh raising outside funding. He credited the shift to a newer generation of bank leaders more willing to take risk than their predecessors, who he said built their careers during a long stretch of risk aversion.
Katayama also pushed back on a reporter's suggestion that US Treasury Secretary Bessent opposes the Takaichi government's approach, saying Bessent has spoken highly of "Takaichinomics" and that Katayama has never heard Bessent use the term "Sanaenomics". Asked whether a weaker yen following a Bank of Japan rate rise signals market distrust of the government, Katayama declined to comment beyond noting that the central bank operates under the Bank of Japan Act.