In response to US Treasury Secretary Scott Bessent’s call for a shift away from reflationary policy, Chief Cabinet Secretary Kihara explained that Japan would maintain its expansionary fiscal policy.
Finance Minister Katayama and Secretary Bessent met on 31 August, and it was reported that Bessent had expressed understanding of Japan’s policy of achieving both a strong economy and fiscal sustainability.
Chief Cabinet Secretary Kihara said specific measures of monetary policy should be left to the Bank of Japan and expressed expectations for appropriate monetary policy management.
At a press conference on the 1st of this month, Secretary Bessent said he had told Japan that it should abandon reflationary policy, calling for a shift away from policies based on the assumption of deflation.