Japan Economy Minister Says Loose Monetary Policy No Longer Needed

Economy Minister Minoru Kiuchi announced Friday that Japan no longer requires excessively loose monetary policy because the country has emerged from its deflationary period. Speaking at a news conference in Tokyo, Kiuchi asserted that Japan no longer needs the reflationist policies associated with the Abenomics era to pursue higher inflation.

Kiuchi distinguished the current economic approach of Prime Minister Sanae Takaichi from the massive stimulus measures introduced by former Prime Minister Shinzo Abe in 2013. This stance aligns with recent communications from Finance Minister Satsuki Katayama, who informed U.S. Treasury Secretary Scott Bessent that the prime minister is not a reflationist.

While Kiuchi noted that monetary policy decisions remain the jurisdiction of the Bank of Japan, his comments follow reports that a government representative urged caution regarding further interest rate hikes during the central bank's September meeting.