Japan's economy minister says loose monetary policy is no longer needed

At a press briefing, Economy Minister Minoru Kiuchi asserted that Japan has moved beyond a deflationary era, eliminating the need for the ultra-easy monetary policy once pursued to spark inflation. He reminded reporters that the Bank of Japan holds sole authority over monetary settings and declined to reveal whether the government opposes additional interest-rate increases. Kiuchi highlighted that the present policies under Prime Minister Sanae Takaichi are distinct from the massive fiscal and monetary stimulus of the 2013 Abenomics program.

He also referenced a recent BOJ meeting where a government representative urged caution on further hikes. The comments follow Finance Minister Satsuki Katayama’s recent statement to U.S. Treasury Secretary Scott Bessent that the prime minister is not a reflationist, despite Kiuchi’s reputation for favoring expansionary spending.