Japan markets on edge over looser fiscal policy, ex-currency diplomat Watanabe says

Japan's markets are experiencing anxiety over potential looser fiscal policies, as former currency diplomat Hiroshi Watanabe warns of risks similar to Britain's "Truss shock." The ruling Liberal Democratic Party may consider tax relief to gain voter support ahead of elections. Prime Minister Sanae Takaichi's recent pledge to cut the consumption tax on food has raised concerns about fiscal discipline, leading to a selloff in government bonds and a decline in the yen. Watanabe cautions that any expansion of tax relief could provoke strong investor reactions, limiting the yen's potential for sustained appreciation.