Japan’s Katayama vows fiscal prudence on defense funding

What happened: Japan's finance minister Satsuki Katayama said the government will weigh fiscal sustainability and stable funding sources as it considers how to finance higher defense spending, after reports that an additional corporate tax hike was under consideration. Key numbers: New five-year defense plan due end of this year, with Why it matters: Any further defense-related tax increase is likely to face hurdles, after former Prime Minister Fumio Kishida drew public backlash in 2022 for using tax increases to fund a defense expansion, with an income-tax increase repeatedly postponed.

Japan's finance minister Satsuki Katayama said the government will weigh fiscal sustainability and stable funding sources as it considers how to finance higher defense spending, after reports that an additional corporate tax hike was under consideration.

Any further defense-related tax increase is likely to face hurdles, after former Prime Minister Fumio Kishida drew public backlash in 2022 for using tax increases to fund a defense expansion, with an income-tax increase repeatedly postponed.