Japan’s Takaichi set to signal policy continuity in cabinet reshuffle

Japanese Prime Minister Sanae Takaichi is reportedly set to keep the majority of her cabinet in place during a reshuffle on Thursday, aiming to bolster support for her planned spending initiatives amidst uncertain financial markets. Key ministers including Finance Minister Satsuki Katayama and Defence Minister Shinjiro Koizumi are likely to remain in their roles, according to sources.

Katayama's reappointment is expected to reassure bond markets, as she played a crucial role in securing a rare US-Japan yen intervention in July. Takaichi, who took office last October, is prioritising policy continuity and stability, particularly as she prepares for a party leadership contest in September. Despite her plans for expansionary fiscal measures, Takaichi is expected to maintain several ministers who are seen as fiscal conservatives, such as Katayama.

This move reflects her strategy to balance domestic pressure to address rising living costs against the need to address concerns over mounting public debt.