Japan Signals End to Abenomics-Style Reflation

Growth Strategy Minister Minoru Kiuchi announced that Japan no longer requires the aggressive monetary easing and flexible fiscal spending that defined “Abenomics-style” reflation. He said the country has entered a phase of gradually rising prices and climbing interest rates, indicating a move away from the previous policy mix.

Japan Times

Kiuchi’s remarks follow a week of yen weakness and rising government-bond yields. The Bank of Japan raised its policy rate at a meeting attended by Kiuchi, marking the first such hike in the current administration. Finance Minister Satsuki Katayama noted that U.S. President Donald Trump expressed concern about the yen during a meeting with Prime Minister Sanae Takaichi, adding pressure on the government to stabilize the currency.

Japan Times

Kiuchi emphasized that Japan has not yet fully escaped deflation and cautioned against equating the current “Sanae-nomics” with past reflationary strategies. He retained his cabinet post after a recent reshuffle, signaling continuity in the administration’s approach. U.S. Treasury Secretary Scott Bessent has similarly urged Japan to move beyond the reflationary policies associated with the late Prime Minister Shinzo Abe.

Japan Times

Following Katayama’s comments, the yen briefly rose to ¥158.33 per dollar but remained near levels that could prompt intervention by Tokyo. Analysts interpret the officials’ statements as an attempt to reassure investors while balancing fiscal flexibility with the need to curb interest-rate pressures.

Japan Times

• “The era of ‘Abenomics-style’ reflationary policies — which involved aggressively easing monetary policy and taking a flexible approach to fiscal policy — is over,” — Minoru Kiuchi, growth strategy minister

Japan Times