Japan FinMin Kato Rules Out New Tax Funding, Flags Yen Volatility

Japan’s Finance Minister Kato said he is aware of media reports about a prospective new tax but stressed there is “no specific plan” to adopt it as a revenue source. He added that ruling and opposition parties will continue talks on funding options as the government moves to abolish the existing gasoline surcharge. Kato reiterated that exchange-rate movements should reflect economic fundamentals and warned of risks posed by speculative trading, aligning with the Group of Seven view that excessive volatility is undesirable. He declined to comment on particular currency levels. On fiscal matters, the minister said the government is discussing how to request debt-servicing costs in the next fiscal-year budget. He pledged to closely monitor Japanese Government Bond markets and pursue appropriate debt management, noting that interest rates are influenced by multiple factors. Separately, the Bank of Japan announced it will provide U.S. dollar funding against pooled collateral to support financial market stability.