Japan’s Takaichi Aims to Hit Growth Button With Markets on Board

Sanae Takaichi Photographer: Kiyoshi Ota/Bloomberg Photo by Kiyoshi Ota /Bloomberg

Article content

(Bloomberg) — Japanese Prime Minister Sanae Takaichi vowed to repeatedly “hit the button” on economic growth and adopt a bolder diplomatic stance without spooking markets during a speech setting out her policy vision. 

Article content

Speaking in parliament after her historic election landslide earlier this month, Takaichi said she would boost strategic investment, carry out active fiscal policy responsibly and pursue assertive diplomacy. 

Article content

Article content

Article content

“We will not pursue reckless fiscal policies that would undermine market confidence,” she said in her first parliamentary address since her Liberal Democratic Party secured its supermajority in the lower house.

Article content

Article content

“We will ensure the pace of increase in our debt is within the range of Japan’s growth and steadily lower the ratio of public debt to gross domestic product. That’s how we will ensure our finances are sustainable, thereby securing market trust,” she added. 

Article content

Still, she stressed that more domestic investment was crucial for expanding the economy. Her comments highlight the fine line she is walking as she seeks to avoid stoking fears in the market over her spending plans while also touting her vision of accelerating growth through bold spending and investment. 

Article content

Article content

As part of her bid to coax more domestic investment, she pledged to create a new approach to government spending that would span multiple years and obviate the need to roll out extra budgets every year. The predictability of public spending patterns would hopefully encourage more private investment in capital along with research and development, she said.

Article content

Article content

Takaichi also said that Japan’s growth would be spurred by two key pillars — risk management industries that include energy and cybersecurity, and growth industries that span AI, semiconductors, and shipbuilding. 

Article content

She said she would give more details of her roadmap for investment next month. Before that her first order of business will be the budget for the coming fiscal year, set to be discussed in parliament from next week. 

Article content

Finance Minister Satsuki Katayama said Friday she’ll endeavor to ensure it wins passage in parliament in a timely fashion.

Article content

“We are making every effort to get the budget passed by the end of the fiscal year,” Katayama told reporters after submitting the budget to parliament. 

Article content

Takaichi also called for a bold stance not only on the economy, but also in diplomacy and defense as well. 

Article content

“We must take the initiative in fundamentally strengthening our defense capabilities,” she said. 

Article content

Revisions are already underway for the three security documents underpinning Japan’s defense posture that pertain to security strategy, defense strategy and a program for building defense capabilities.