Japan does not need excessively loose monetary policy, economy minister says

Japan's Economy Minister Minoru Kiuchi stated on Friday that the nation is no longer grappling with deflation and does not require overly accommodative monetary policy to elevate inflation levels. The responsibility of determining monetary policy decisions lies with the Bank of Japan, Kiuchi clarified, refraining from expressing whether the government opposed additional rate hikes from the central bank.

During a routine news conference, Kiuchi emphasized that Japan had moved beyond the era necessitating the type of reflationary policies implemented under Abenomics. He further stated that Prime Minister Sanae Takaichi's policies diverged from the extensive stimulus measures introduced by former premier Shinzo Abe in 2013. Kiuchi's comments came in response to inquiries from reporters regarding a summary of opinions from the Bank of Japan's September policy meeting, which indicated a government representative advocating for caution regarding further interest rate increases.

These remarks join the government's criticism of the notion that Japan was pursuing reflationist policies to stimulate demand via expansionary fiscal and monetary initiatives. Finance Minister Satsuki Katayama had previously informed US Treasury Secretary Scott Bessent that Prime Minister Takaichi was not a reflationist during a meeting last week.

Kiuchi is often associated with a reflationist stance due to his past resistance to interest rate hikes and his connection with a group of lawmakers advocating for increased government spending.