Japan Economic Weekly

Research evidence excerpt

Japan Economic Weekly

Global Markets Research

14 July 2026Japan Economic Weekly

Economics - Japan

Research Analysts

Fiscal management timeline for 2026 Japan Economics

Kyohei Morita - NSC

Market rattled by some of the wording of the draft Basic Policy kyohei.morita@nomura.com

+81 3 6703 1395

1.Domesticpolicy(government):Fiscalmanagementtimelinefor2026centeredon Masaki Kuwahara - NSC

threemainareas(KengoTanahashi) masaki.kuwahara@nomura.com

+81 3 6703 3876

• Tensions between the ruling and opposition parties in the Diet have eased to some

Kengo Tanahashi - NSC extent, raising the prospect of the National Council being reconvened. In this report, kengo.tanahashi@nomura.com

we look at the fiscal policy outlook for 2026 H2 in three areas: the government's +81 3 6703 1295

growth strategy, consumption tax cuts, and defense spending.

Uichiro Nozaki - NSC

• With regard to the growth strategy, the focus will be on the budget requests due to be uichiro.nozaki@nomura.com

submitted by end-August. With regard to the consumption tax cuts, much will depend +81 3 6703 1284

on the willingness of both the ruling and opposition parties to compromise; but it Yuki Ito - NSC

remains to be seen how long this will take. With regard to defense spending, the focus yuki.ito@nomura.com

will be on the budget requests from the Ministry of Defense and on whether the panel +81 3 6703 3867

of experts due to publish a report on the three key national security policy documents Zhaoqi Liu - NSC

this autumn sets a target for defense spending as a percentage of GDP. elias.liu@nomura.com

+81 3 6703 3844

2.Domesticpolicy(BOJ):Aquestionmarkagainstsomeofthewordingofthe Yuna Minegishi - NSC

BasicPolicy(UichiroNozaki) yuna.minegishi@nomura.com

+81 3 6703 1287