Japan recalibrates messaging to counter Takaichi reflationary policy concerns

  • Japan’s government began adjusting its messaging about Prime Minister Sanae Takaichi’s economic policies.
  • Late August officials concluded financial markets needed a clearer explanation of the government’s policy stance.
  • US Treasury Secretary Scott Bessent supports the policies but questioned their communication to investors.

Japan’s government has begun adjusting its market messaging to reassure investors that Prime Minister Sanae Takaichi is not pursuing reflationary policies. Finance Minister Satsuki Katayama said in a Saturday interview with TV Tokyo that US Treasury Secretary Scott Bessent considers Takaichi’s economic policies appropriate for current conditions, while questioning whether the government had explained that position clearly enough to financial markets. Katayama said officials concluded around late August that the message needed to be communicated more clearly, amid investor perceptions that the administration’s policies were reflationary.

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