Takaichi says economy doesn’t need reflationary policy

Prime Minister Sanae Takaichi said Japan no longer needs policy to stimulate inflation as the economy isn’t in a state of deflation anymore, echoing a comment made recently by U.S. Treasury Secretary Scott Bessent.

“Japan’s economy is no longer at a stage where it needs reflationary policies with monetary easing and fiscal expansion,” Takaichi said in response to questions in parliament Thursday. Her policy “differs from so-called reflationary policy,” she said.

Takaichi’s government has sent a series of signals lately that it is moving beyond reflationary policy, following Bessent’s remarks that Japan should leave efforts to reflate the economy behind. Bank of Japan Gov. Kazuo Ueda also said last month that the central bank’s policy phase has shifted, with more focus now needed on upside price risks.