The recent series of actions by the Japanese government seem to tell a story of parallel progress in fiscal reconstruction and cryptocurrency assets.

Let's first look at the fiscal data. Japanese Prime Minister Fumio Kishida announced on December 26 that the country expects to achieve a primary fiscal surplus of 1.34 trillion yen in the 2026 fiscal year—this is the first time in 28 years that Japan has broken even. At the same time, the Cabinet approved an annual budget of 122.3 trillion yen. The core logic of this budget is to stimulate economic growth while stabilizing the fiscal fundamentals, thereby easing market concerns over Japan's debt pressure.

However, it is worth noting that the Japanese government's policy focus is quietly shifting. From a sole focus on fiscal balance, it is moving toward a deeper strategic goal—reducing the debt-to-GDP ratio. This shift reflects a return to a long-term perspective. Of course, the yield on Japan's 10-year government bonds has risen to its highest in 27 years, and this pressure has objectively driven this adjustment.

On the regulatory front for crypto assets, Japan's Financial Services Agency (FSA) is also advancing upgrades in tandem. Plans are underway to elevate the existing crypto asset regulatory department to a formal "section" level starting from July 2026 in the next fiscal year. This newly established "Crypto Asset & Blockchain Innovation Office" will have greater administrative authority. This marks a clear rise in the status of crypto assets within Japan's regulatory system.

A more critical shift is reflected in the tax policy positioning. The 2026 fiscal year tax reform outline explicitly defines crypto assets as "financial products that contribute to the formation of national assets." This change in wording is noteworthy. According to the preliminary framework, gains from spot trading, derivatives trading, and ETFs may be subject to a preferential separate taxation system, with up to three years of loss carryforward. Meanwhile, staking yields, lending income, and NFT transactions are likely to still be subject to comprehensive taxation, with further details under discussion.

From the declaration of fiscal reconstruction, to the organizational upgrade of the crypto department, and then to the redefinition of the tax system, this series of actions seems to indicate that Japan aims not only to achieve "balance" through traditional fiscal means but also to attract capital inflows and diversify asset allocation by optimizing policies for crypto assets. Is this a passive response driven by the practical need to ease debt pressure, or does it secretly contain an active layout to leverage the potential economic pull of crypto assets? There may be no simple answer to this question, but the signals of policy alignment are already very clear.