Japanese PM Takaichi says no intention of pursuing fiscal policies that would lead to excessive inflation and she expects the BoJ to conduct appropriate monetary policy to sustainably and stably hit its 2% price target

Japanese PM Takaichi says no intention of pursuing fiscal policies that would lead to excessive inflation and she expects the BoJ to conduct appropriate monetary policy to sustainably and stably hit its 2% price target.

A leader whose public record has leaned toward loose fiscal and monetary settings explicitly disavowing inflationary stimulus is a familiar pattern in Japan: incoming premiers with reflationist reputations have historically softened their stance once in office, as bond and currency markets test the credibility of their fiscal plans and force the rhetoric back toward the orthodoxy. Comments of this kind are best read as an effort to steady JGBs and the yen, not as new policy; the transmission channel is the super-long end of the JGB curve, where term premium moves on fiscal credibility, and the yen, where any perceived retreat from pressure on the BoJ removes a depreciation catalyst. The operative distinction is between reassurance and constraint: language deferring to the BoJ's independent judgment preserves the central bank's room to normalise, whereas pressure framed around supporting the economy has on past occasions been read as an argument against further tightening. What matters next is whether the cabinet's actual supplementary budget and tax stance match the rhetoric, and whether BoJ officials echo the same framing in subsequent commentary, since remarks from the political side alone have tended to fade within sessions when unsupported by action. As verbal reassurance rather than a decision, the signal is directional and its durability will be set by the next fiscal package.