Parliament Begins Debate On Extra Budget Amid Continued Decline In Gov't's Approval Ratings

Japan's parliament started debating the government's Y13.2tn extra budget for the fiscal year running through end-March, which is intended to ease the finsncial pressure on household and help the beleaguered Kishida administration regain political momentum.

• Speaking in the House of Representatives, the Prime Minister sought to defend his tax cut proposals. They have been interpreted as an attempt by Kishida to get rid of his nickname "zozei-megane" (bespectacled tax hiker) and have proven unpopular with both the voters and senior Liberal Democratic Party (LDP) executives.
• The latest round of opinion polls confirmed that the Cabinet's approval ratings are at all-time lows, below the 30% threshold seen as a boundary of a danger zone for Japanese Prime Ministers. This falls in line with a trend we flagged last week, with faltering support metrics killing earlier speculation re: potential snap election.
• While it would be an uphill battle for Japanese opposition parties to try and unseat the LDP government, a steady decline in support for the current administration may stimulate factional tensions within the ruling party, raising the odds of a challenge to Fumio Kishida's leadership.
• Kishida wants to get the extra budget approved by the end of this month, before the start of intensified works on the FY2024 spending plan in December, another key episode for Japan's fiscal policy. Finance Minister Shunichi Suzuki called on lawmakers today to adopt the supplementary FY2023 budget as soon as possible.