Japan No Longer Needs Loose Monetary Policy, Economy Minister Says

Japan's Economy Minister Minoru Kiuchi said on Friday that the country no longer needs excessively loose monetary policy to pursue higher inflation. The statement comes after a government representative called for caution over further interest rate hikes at the Bank of Japan's September policy meeting.

Kiuchi noted that Japan has emerged from its deflationary period and does not require reflationist policies like those introduced under former Prime Minister Shinzo Abe in 2013. He emphasized that Prime Minister Sanae Takaichi's policies are different from Abenomics, which aimed to stimulate the economy through massive stimulus.

The Economy Minister's comments add to a growing narrative within the government that it is not pursuing reflationist policies to bolster demand through expansionary fiscal and monetary steps. Finance Minister Satsuki Katayama previously dismissed such views, stating that Prime Minister Takaichi was not a reflationist.