Takaichi lays out growth-focused fiscal plans after cabinet reshuffle
The prime minister says she wants faster policy action for a stronger economy and a cycle of higher tax revenue feeding growth
Published
Prime Minister Sanae Takaichi has set out plans for what she called careful, growth-oriented fiscal policy, including efforts to speed up measures for a stronger economy and to build a positive cycle in which economic growth lifts tax revenue.
The announcement follows a cabinet reshuffle earlier Thursday in which Takaichi kept Satsuki Katayama as finance minister, along with growth strategy minister Minoru Kiuchi and industry minister Ryosei Akazawa, according to The Japan Times. The paper reported that markets showed little reaction to the reshuffle, with the Nikkei 225 trading flat, the yen slightly stronger at ¥155.6 to the dollar in the afternoon, and the 10-year Japanese government bond firming slightly.
Takaichi is expected to attend the U.N. General Assembly in New York later this month and is seeking a meeting with President Trump ahead of his planned Sept. 24 talks with Chinese President Xi Jinping, though Japanese media reports cited by ABC News say the prospects for that meeting are unclear. Her government has raised defense spending to 2% of GDP and wants to increase it further for 2027, and ABC News reported it is likely to face a U.S. push for an even bigger rise, possibly to 3.5% of GDP.
The fiscal approach comes days after the Treasury secretary described U.S. support for Japan's currency policies as a nominal statement, following weeks of coordinated action on the yen. Takaichi's plans track the direction already set by the reshuffle, which kept growth-focused ministers in place, and by preparations for tax reform details expected by mid-September. The emphasis on growth through higher revenue and expansion restates existing priorities rather than marking a shift, leaving the near-term policy path largely unchanged even as it signals continuity ahead of the talks with Trump later this month.