Takaichi government, first cabinet reshuffle: continuity on the economy and the yen
The sacking of Interior Minister Yoshimasa Hayashi leaves one of the leading figures who challenged Takaichi for the leadership of the LDP without a government post
from our correspondent Marco Masciaga
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NEW DELHI – Japanese Prime Minister Sanae Takaichi has announced her first cabinet reshuffle, signalling continuity in economic and monetary policy whilst seeking to consolidate her control over the governing majority and the Liberal Democratic Party (LDP). Among the ministers, the two most significant reappointments are those of Minoru Kiuchi as Minister for the Economy and Satsuki Katayama as Minister of Finance.
The first is a staunch reflationist who, over the past year, has been pushing for expansionary policies aimed at reviving the Japanese economy. “Without growth,” Takaichi said during a press conference, “we cannot maintain fiscal sustainability. Now is the time to step up our efforts to implement our responsible and proactive fiscal policy.”
The second is a former senior official at the Ministry of Finance and, whilst held in high regard by Takaichi, is seen as a more reassuring figure than the Prime Minister. Her reappointment sends a signal of continuity not only on the public finances front, but also on the currency front, given that it was Katayama who coordinated the joint intervention with the US Treasury last July to stem the yen’s depreciation.
The Japanese yen is once again under pressure after the Federal Reserve raised interest rates on Wednesday 16 September, further increasing the already very high likelihood that the Bank of Japan will raise its key interest rate to 1.25 per cent today. The markets will be closely watching Governor Kazuo Ueda’s press conference for any indications of a possible further rate rise before the end of the year.
Among the appointments confirmed today, 17 September, is the head of the third economic ministry, where Ryosei Akazawa remains in post – the man who, over the past year, has been tasked with defusing the threats of a trade war issued by US President Donald Trump. The ministers confirmed include the Foreign Minister Toshimitsu Motegi and the Defence Minister Shinjiro Koizumi.
