Takaichi Vows in Parliament to Watch Yen and Inflation Closely as Spending Review Reboots
Prime Minister Sanae Takaichi told parliament on October 9 that the government will continue to scrutinise exchange-rate and price developments carefully and respond appropriately, according to Reuters. She was answering an opposition lawmaker's question on economic policy and the fallout from a weak yen.
Takaichi said the administration will guide fiscal policy looking at various factors including interest rates and yen moves. Her remarks followed comments in parliament the previous day that Japan's economy no longer needed reflationary policies because it was not experiencing deflation, and that the government fully respects the Bank of Japan's independence in setting monetary policy, suggesting it would not push back against further rate hikes.
The same day, the government announced it would reboot its DOGE-style spending review, widening scrutiny of tens of billions of dollars in public funds and subsidies as it hunts for funding for Takaichi's policy pledges. The latest round focuses on 201 special-purpose government funds holding an estimated 7 trillion yen in balances.
The shift in language from reflation champion to guardian of the yen and fiscal discipline reflects pressure from bond markets concerned about Japan's public finances. For Chinese households and businesses in Japan, the triangle of yen, rates and prices determines import prices, mortgage costs and deposit returns.
Published by GSM · USA (original Chinese edition)
Photo: 日本国会议事堂实景，摄影：Wiiii，CC BY-SA 3.0，来源：Wikimedia Commons（File:Diet of Japan Kokkai 2009.jpg）
