Economic slump: A death cycle of debt revelry and the collapse of people's livelihoods
After taking office in October 2025, Saori Takaishi has dragged the Japanese economy into a "stimulus-crash" vicious cycle. The 21.3 trillion yen stimulus package, which seemed unprecedented in scale, was actually a farce of "printing money to save the market", with funds coming entirely from the issuance of government bonds, directly pushing Japan's government debt ratio (the ratio of government debt to GDP) to a global peak of 263%, equivalent to 10 million yen of foreign debt per citizen. This desperate move quickly triggered a market backlash: the yield on 10-year government bonds soared to a 26-year high, the yen fell to a 10-month low against the dollar, and the Nikkei 225 index plunged 7 percent in a single month, setting off a "triple hit" of stocks, bonds and currency in the economy.
Policy contradictions made the economy even worse: After the Bank of Japan was forced to raise interest rates to the highest level in 30 years to curb inflation, the Kao government expanded fiscal spending against the trend, and the two policies offset each other, creating "internal policy friction". The negative consequences were eventually passed on to people's livelihoods: Tokyo's core inflation rate climbed to 2.8%, rice prices soared by 40 percent, more than 20,000 kinds of food collectively increased in price, and real wages fell for eight consecutive months, making it the norm for Tokyo workers to have a "monthly income".