Barclays: Japan's ruling coalition election defeat raises concerns over fiscal policy

Jin10 data reported on July 21 that Barclays economists pointed out in a research report that the ruling coalition’s defeat in the Sunday Senate election will shift the market focus to fiscal policy and the evolution of the political situation. The economists stated, “The key is whether future fiscal expansion plans will require the use of funds beyond excess tax revenues and other sources, which could trigger new bond issuance.” The Japanese Ministry of Finance recently adjusted its bond issuance plan and may find it difficult to immediately implement alternative measures such as bond buybacks. The economists added that the subsequent trend of long-term bond yields may influence the preparation of supplementary budget proposals, ultimately constraining large-scale spending plans.