Will Takaichi visit Kyiv? Zelensky’s invite puts Japan PM in diplomatic bind

Japanese Prime Minister Sanae Takaichi's cabinet reshuffle, set for Thursday, aims to maintain policy continuity and bolster support for her spending initiatives amid market uncertainty. Takaichi plans to keep Foreign Minister Toshimitsu Motegi and Defense Minister Shinjiro Koizumi in place, despite their previous rivalry in the LDP leadership race.

Finance Minister Satsuki Katayama, who played a crucial role in negotiations with the US Treasury Secretary over a joint yen intervention, is also expected to retain her position. Analysts believe this decision will reassure bond markets concerned about Takaichi's expansionary fiscal approach, which could lead to increased debt issuance.

While Takaichi's reflationist policies, including tax cuts and spending increases, may face opposition, she remains committed to fiscal discipline following criticism from the US Treasury Secretary. The new cabinet will also include representatives from the LDP's coalition partner, the Japan Innovation Party, signaling a focus on political unity.

Opposition parties will scrutinize the government's funding plans for key fiscal measures, including a two-year sales tax cut on food items.