Japan Reassures Markets of Anti-Reflation Stance
Japan's Finance Minister Satsuki Katayama has attempted to reassure investors that Prime Minister Sanae Takaichi does not plan to revive Abenomics, a policy of heavy monetary support and flexible government spending. In a phone call with US Treasury Secretary Scott Bessent last week, Katayama emphasized that Takaichi's 'responsible and proactive' fiscal agenda is not intended to stimulate the economy through reflationary measures.
Katayama's message was aimed at calming investor unease over proposals such as higher spending and a temporary cut to the sales tax on food. These proposals have been seen as potential hints of stimulus, which could lead to a weaker yen and higher inflation expectations.
The Finance Minister stressed that Tokyo wants to maintain 'orderly' currency markets and has promised close coordination with Washington on this issue. Economy Minister Minoru Kiuchi also chimed in, stating that the Abenomics-style phase is over.