Jōnai Minoru (城内実), Minister of State for Economic and Fiscal Policy, said in a Bloomberg English-language interview that advancing policies to improve supply capacity and productivity would increase investment in Japan and in yen-denominated assets, naturally driving up demand for the yen.
In an English-language interview, Jōnai (城内) explained that if the government’s growth-oriented policies strengthen supply capacity and productivity, capital inflows into Japan and investment in yen-denominated assets would increase. He also said, “I do not think the yen’s depreciation will continue,” and expressed the view that “it could instead put upward pressure on the yen.”
The article also noted that Jōnai (城内) has been calling for Japan’s economic recovery using the term “responsible proactive fiscal policy.” It referred to him as a Cabinet Office advisory council member associated with the reflationist school and discussed the difficulty of coordinating fiscal and monetary policy.
The article lists issues surrounding speculation about the relationship between the reflationist school and the appointment of advisory council members under the Takaichi (高市) administration, as well as the relationship between long-term interest rates and foreign exchange rates. Overall, it presents a series of points that call for a reassessment of the assumption that a sustained stronger yen would weigh on economic activity.
The article is positioned in the context of corporate sentiment and investment trends under a stronger yen, as well as yen appreciation risk. The reporter takes the view that caution is warranted when predicting the effects of fiscal and monetary policy in simplistic terms.