Japan PM to retain Kiuchi as economy minister in cabinet reshuffle, Yomiuri reports

Japanese Prime Minister Sanae Takaichi is reportedly set to retain Minoru Kiuchi as the minister in charge of economic revitalisation in a cabinet reshuffle, according to the Yomiuri newspaper. Trade minister Ryosei Akazawa is also expected to maintain her position, the paper noted without providing sources. The prime minister's office has not yet commented on the matter.

Markets have been closely monitoring the potential reshuffle, with particular interest in whether Kiuchi will keep his post. Known for his support of expansionary fiscal and monetary policies, many are watching to see if this decision could signal a shift in Takaichi's plans for increased government spending. This has caused bond yields to reach a three-decade high of 3.025% on Tuesday due to concerns about potential debt issuance to support these fiscal initiatives.

Keisuke Tsuruta, a senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, explained that there had been speculation in the bond market that a change in Kiuchi's position could lead to an increase in government bond buying. However, if he remains in his role, this speculation may dissipate, according to Tsuruta. As the Cabinet Office minister, Kiuchi has the privilege to attend the Bank of Japan's policy meetings alongside the finance ministry, which sends its own representative.