Japan’s Finance Minister Calls for New Economic Strategy as Inflation Replaces Deflation Era

Japan's Finance Minister Katsunobu Kato speaks during an interview with Reuters at the Finance Ministry in Tokyo, Japan April 17, 2025. REUTERS/Issei Kato

On October 14, 2025, Japan’s Finance Minister Katsunobu Kato said on Tuesday that the government must develop a new economic strategy that aligns with the country’s current circumstances, as inflation has become a major challenge, replacing the deflation concerns that defined the era of “Abenomics.”

“At this point, it’s clear that the situation has changed,” Kato said at a regular press conference, responding to questions about former Prime Minister Shinzo Abe’s 2013 economic policies. The Abenomics program was built on three key pillars,
aggressive monetary easing, flexible fiscal policy, and structural reforms, which successfully helped Japan escape more than a decade of deflation, but also led to a significant rise in public debt.

“Inflation is no longer something we need to pursue; it has now become a new challenge for Japan’s economy,” Kato said. “Therefore, I believe it is necessary for the government to craft economic policies that are suitable for today’s conditions.”

Kato’s remarks come as Sanae Takaichi, the newly elected leader of the Liberal Democratic Party (LDP) and a strong supporter of Abenomics, is expected to continue promoting policies aimed at stimulating inflation and growth. Her appointment last week has led markets to anticipate that the Bank of Japan will likely delay any near-term interest rate hikes, boost Japanese stocks while weaken the yen.

When asked about the yen’s recent volatility, Kato stated that the government would closely monitor currency movements to prevent excessive or disorderly fluctuations. “We’ve seen the yen weaken rapidly since last week,” he said. “It’s important that exchange rates move in a stable manner that reflects economic fundamentals.”

Source: Reuters

Copywriter: Siam Associated Press (SAP) Editorial Department
Pictures: Some illustrations come from the Internet. If there is any infringement, please contact us to delete it.
Source of material: official media /online news