Japan Launches DOGE-Inspired Office to Combat Budget Waste and Ensure Fiscal Sustainability

Finance Minister Katayama clarified that Japan's DOGE-inspired initiative will not restructure government organizations.

Japan has established its own version of the United States' Department of Government Efficiency (DOGE) on Tuesday, aiming to address concerns regarding a $135-billion stimulus package.

Last week, Prime Minister Sanae Takaichi announced substantial government expenditure to stimulate the economy, maintaining that it was fiscally responsible despite worries about worsening Japan's already massive debt burden.

"In our current era, fiscal sustainability is essential... it is crucial for the public to witness our consistent efforts toward achieving this goal," Japanese Finance Minister Satsuki Katayama explained during a press conference.

When introducing the initiative she described as Japan's equivalent to DOGE, the minister emphasized that "there is significant public interest in eliminating waste."

In the United States, DOGE, led by Elon Musk, deployed teams of technology experts to methodically dismantle and disrupt the country's civil service, which employs more than two million people.

However, the Japanese counterpart will consist of approximately 30 active government officials and will not seek to transform government structures, according to Katayama.

Formally named the Office in Charge of Reviewing Special Tax Measures and Subsidies, it will evaluate programs with minimal policy impact, she added.

This initiative forms part of a coalition agreement established a month ago between Takaichi's ruling Liberal Democratic Party and their junior partner, the Japan Innovation Party.

The office is anticipated to become fully operational next year, with its influence reflected in the budget for the fiscal year beginning April 2027, Katayama stated.

Takaichi has supported the 21.3-trillion yen stimulus package approved by her government last week, which aims to revitalize growth in the world's fourth-largest economy, alleviate inflationary pressure on households, and restore the ruling party's declining popularity.

Nevertheless, expectations that the new premier would undertake substantial spending have driven Japanese government bond yields to historic highs this week and placed pressure on the yen.