Japanese Economy Minister Minoru Kiuchi emphasized the importance of the Bank of Japan's (BOJ) independence regarding monetary policy. Speaking at a Reuters NEXT Newsmaker event in Tokyo on October 15, Kiuchi acknowledged the government's commitment to allowing the BOJ to manage monetary policy aimed at achieving a 2% inflation target.
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Kiuchi addressed his reputation as a reflationist, noting that he disputes this label. He stated that Japan is no longer in a situation where reflationary policies are necessary, asserting that Prime Minister Sanae Takaichi's government does not pursue such measures. He described Japan as transitioning to a growth-oriented economy and urged global investors to reevaluate their perceptions in light of ongoing economic changes.
"The Japanese economy is no longer the same economy it was during the long years of deflation. I would encourage you to assess Japan on the basis of this changing reality," Kiuchi remarked, adding that now is an opportune time for investment in Japan.
Moreover, Kiuchi highlighted the need for fiscal sustainability as the government increases public spending. He clarified that the phrase 'proactive public finances' should not imply a relaxation of fiscal discipline. Instead, he believes that strategic investments can enhance Japan's growth potential, which would then lead to higher wages, incomes, and tax revenues while maintaining fiscal responsibility.
The government's growth strategy includes over 370 trillion yen (approximately $2.34 trillion) in public and private investment by fiscal 2040, focusing on sectors like semiconductors, artificial intelligence, quantum technologies, and content industries.
(Reporting by Rocky Swift and Makiko Yamazaki; Editing by Jamie Freed and Hugh Lawson)