Japan's recent series of economic actions are worth paying attention to. A country plagued by debt for decades suddenly announced an expected primary fiscal surplus of 1.34 trillion yen in the 2026 fiscal year—this will be the first time in nearly 28 years. During the same period, the local financial sector also released a new classification definition for crypto assets. This is no coincidence.

The changes on the fiscal side are quite evident. The local government approved an annual budget of 122.3 trillion yen this year, aiming to stimulate economic vitality while gradually easing long-term debt pressures. This "dual-track" approach has been difficult to pursue simultaneously in the past, but now it is being put on the table.

On the financial innovation front, regulators plan to upgrade the existing crypto asset sector to a formal category starting from July 2026, which means increased resource allocation and policy attention. Accompanying this is an adjustment to the tax framework—crypto assets are officially defined as "financial products that contribute to the formation of national assets."

Specifically, profits from spot, derivatives, and ETF trading may be subject to lower separate taxation, allowing for loss carryforwards of up to three years. This is undoubtedly attractive to participants. However, the tax treatment of staking, lending yields, and NFT trading is still under discussion, with details yet to be finalized.

What is the underlying logic? The central bank's interest rate hikes are relatively moderate and gradual, providing more room for fiscal policy to maneuver. By simultaneously promoting fiscal stability and the institutionalization of crypto assets, the local authorities may be aiming to advance both financial innovation and asset diversification, seeking new engines for economic growth. Is this a short-term debt management strategy or a long-term restructuring of the economic framework? This remains to be seen. But what is certain is that Japan's policy push in these two areas in 2026 is likely to become an important variable in the market.