NEW DELHI – Japanese Prime Minister Sanae Takaichi has announced her first cabinet reshuffle, signaling continuity in economic and currency policy, and aiming to solidify her control over the governing majority and the Liberal Democratic Party (LDP). Among the ministers, the two most significant confirmations are Minoru Kiuchi for the economy and Satsuki Katayama for Finance.
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The first is a committed reflationist who over the past year has pushed for expansive policies aimed at reviving the Japanese economy. “Without growth,” Takaichi said during a press conference, “we cannot maintain fiscal sustainability. Now is the time to accelerate efforts to implement our responsible and proactive fiscal policy.”
The second is a former senior bureaucrat of the Ministry of Finance and, while enjoying Takaichi’s esteem, is considered a more reassuring figure than the prime minister. Her confirmation sends a signal of continuity not only on the public accounts front but also on the currency front, as it was Katayama who coordinated last July’s joint intervention with the U.S. Treasury to curb the yen’s depreciation.
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The Japanese currency is once again under pressure after the Federal Reserve raised interest rates on Wednesday, September 16, further increasing the already high chances that today the Bank of Japan will raise the cost of money to 1.25 percent. Markets will closely follow Governor Kazuo Ueda’s press conference looking for indications of a possible further hike before the end of the year.
Among today’s confirmations on September 17 is also the leadership of the third economic ministry, where Ryosei Akazawa remains in place, the one who over the past year has had the task of neutralizing the trade war threats launched by U.S. President Donald Trump. Among the confirmed ministers are also Foreign Minister Toshimitsu Motegi and Defense Minister Shinjiro Koizumi.
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