Kishida says joint yen intervention only buys time as Japan pushes 370 trillion yen growth plan

Former Prime Minister Fumio Kishida said coordinated U.S.-Japan intervention in currency markets may temporarily steady the yen, but argued it cannot deliver a lasting fix without broader economic reform. Speaking after the two governments disclosed Monday that they entered foreign-exchange markets the previous Friday to support the currency, Kishida said the deeper answer lies in a 370 trillion yen ($2.3 trillion) growth strategy intended to revive Japan’s long-term expansion. Kishida, who now leads a ruling-party policy group advising Prime Minister Sanae Takaichi, is backing a 14-year blueprint covering 17 strategic industries. He said public funds should be used as seed capital to draw in private investment, including Japan’s 2,300 trillion yen in household financial assets and money from overseas, rather than narrowing the debate to immediate fiscal limits. The plan implies average annual domestic investment of more than 26 trillion yen, and even if the government financed only one-third, the yearly commitment would still exceed the revenue loss from Takaichi’s food sales-tax cut. The strategy comes as Takaichi tries to lift Japan’s growth rate while markets remain uneasy about one of the developed world’s heaviest public debt burdens. She is pursuing a cut in the sales tax on food and calling for higher defense spending, but financing details remain unclear. Kishida said investors are more likely to respond to a credible long-term vision than to simple numerical targets. He pointed to recent industrial policy efforts as evidence the model can work, citing factory investments by TSMC and Micron Technology. Japan’s Ministry of Economy, Trade and Industry has earmarked as much as 500 billion yen, about $3.2 billion, to support Micron’s expansion of an advanced memory-chip plant in western Japan, roughly one-third of the project’s total cost. Under Takaichi, the ministry’s budgeted support for advanced semiconductors and AI (artificial intelligence) has nearly quadrupled to about 1.23 trillion yen this fiscal year. Kishida also said the government must follow the intervention with credible fiscal and monetary coordination while respecting the Bank of Japan’s independence. With markets reading Takaichi as favoring a dovish stance, even as Governor Kazuo Ueda gradually raises interest rates, Kishida said monetary policy is for the BOJ alone and should not be directed by the government. He added that stronger communication between political leaders and the central bank could help markets better understand policy. Looking back on his 2021-2024 premiership, which included Russia’s invasion of Ukraine, the end of the Covid pandemic and Japan’s first inflation in decades, Kishida defended his push to move households from savings into investment. Nearly 28 million new tax-free investment accounts had been opened by the end of 2025, but he expressed doubt about proposals to make government bonds eligible, saying the program’s purpose is to shift household assets into risk-bearing investments such as equities.