Japan’s Takaichi sparks concern over BOJ autonomy with reflation talk
Japan’s incoming leader Sanae Takaichi has pledged swift economic stimulus and a gasoline-tax cut to ease living costs, but her comments on monetary policy have revived concerns about the Bank of Japan’s independence.
Takaichi said she will order a stimulus package “immediately” on taking office and warned that a weak yen, while helping exports, is hurting households through costlier imports. She stressed Japan’s bond market is stable thanks to domestic ownership but added that fiscal and monetary policy must align — a stance reminiscent of Shinzo Abe’s early Abenomics era.
Analysts say her approach could pressure BOJ Governor Kazuo Ueda to keep rates low, but political and economic realities — stubborn inflation, public anger over prices, and a fragile coalition — may temper any direct interference. Former officials warned that a deeper yen slide could force Takaichi herself to accept rate hikes to avoid worsening consumer pain.
The yen has already slipped to an eight-month low as markets assess whether Japan’s “new era” under Takaichi will mean more political influence over central-bank policy, or a pragmatic balance shaped by inflation and public sentiment.
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Sanae Takaichi, the newly elected leader of Japan's ruling party, the Liberal Democratic Party (LDP) spoke overnight, check out those links above for more.
Takaichi’s tone suggests fiscal expansion and slower tightening, a mix that may keep upward pressure on Japanese yields limited but risk further yen weakness if investors fear renewed political sway over BOJ policy.
