Kiuchi says Takaichi government is not pursuing reflationary policy
Japan's economy minister says loose monetary and fiscal policy is not what the country needs now
Published
Japan's economy minister, Minoru Kiuchi, said reflationary policy is not what Japan needs at present and that the Takaichi administration is not pursuing it.
Kiuchi has held the economic and fiscal policy post since October 2025, when he succeeded Ryosei Akazawa under Prime Minister Sanae Takaichi. He made a similar point on September 25, when he said the era of Abenomics-style reflationary policy was over, according to a Reuters analysis carried by Investing.com.
The comment sits against Takaichi's own record. She took office a year ago pledging to raise spending to drive growth and stacked government panels with aides who favoured loose fiscal policy, the Reuters analysis said. She told parliament more recently that fiscal sustainability is a prerequisite for her 'responsible and proactive' fiscal policy, a shift from her earlier promise to put growth ahead of fiscal discipline. Finance Minister Satsuki Katayama has said the government recalibrated its messaging around late August to reassure markets that Takaichi was not chasing reflation.
Kiuchi's remark pushes back against any assumption that the government will lean on loose monetary and fiscal policy to drive growth, a read that sits uneasily against Takaichi's October 5 pledge to pursue growth-driven revenue while managing debt issuance. It comes as Japan's long-end bond yields have been grinding to multi-decade highs on expectations that the Bank of Japan will keep tightening. By ruling out reflationary intent, Kiuchi removes one potential source of renewed yen weakness or looser fiscal signalling that might have eased pressure on those yields, leaving the Bank of Japan's own policy signals, rather than government rhetoric, as the main force that will decide whether Japanese long-dated yields keep climbing and whether that in turn spills into capital flows affecting long-dated Treasurys.