By Leika Kihara
TOKYO, Oct 2 (Reuters) – Japan is no longer experiencing deflation so does not need excessively loose monetary policy for the pursuit of a higher inflation rate, Economy Minister Minoru Kiuchi said on Friday.
Monetary policy decisions are the jurisdiction of the Bank of Japan, Kiuchi added, declining to comment on whether the government opposed further central bank interest rate hikes.
“Japan has emerged from an era where it needed the kind of reflationist policies taken under Abenomics,” Kiuchi said at a regular news conference, adding that Prime Minister Sanae Takaichi’s policies were different from the massive stimulus introduced by former premier Shinzo Abe in 2013.
“What I mean to say is that Japan is no longer in a deflationary period, and therefore does not need excessively loose policy that pursues inflation,” Kiuchi said.
Kiuchi made the remarks in response to reporters asking about a summary of opinions of the BOJ’s September policy meeting, which showed a government representative called for caution over further interest rate hikes.
The remarks add to commentary from the government dismissing the viewpoint that it was pursuing reflationist policies to bolster demand through expansionary fiscal and monetary steps.
Finance Minister Satsuki Katayama said on Tuesday she made it clear to US Treasury Secretary Scott Bessent last week that the prime minister was not a reflationist.
Kiuchi is widely regarded as reflationist due to his past caution towards interest rate hikes and association with a group of lawmakers that called for expansionary spending.
(Reporting by Leika Kihara; Editing by Muralikumar Anantharaman and Christopher Cushing)
