Japan’s Takaichi keeps key ministers in cabinet reshuffle

The small-scale reshuffle comes as Takaichi navigates rising inflation and a weak yen while pursuing a consumption tax cut on food beginning next year.(AFP) — Japanese Prime Minister Sanae Takaichi retained her key ministers in a Cabinet reshuffle Thursday aimed at solidifying the ruling coalition and advancing a food tax cut despite concerns about how it will be financed.Japanese prime ministers routinely reshuffle their cabinets to refresh the government’s public image and distribute ministerial posts to loyal supporters and experienced lawmakers from their party.But Takaichi — who has unusually high approval ratings nearly a year into office — kept core members of her team, according to a Cabinet list announced by her right-hand man and top government spokesman, Minoru Kihara.They include Kihara; Finance Minister Satsuki Katayama; Foreign Minister Toshimitsu Motegi; and Defense Minister Shinjiro Koizumi.“Without economic growth, we can’t maintain sustainable finances,” Takaichi told reporters, pledging to continue pursuing her “responsible, proactive fiscal policy.”By encouraging domestic investment and thereby increasing employment and household income, “we aim to realize a virtuous cycle” of economic growth that allows Japan to increase tax revenue, she said.The prime minister also retained key economic ministers, including Trade and Industry Minister Ryosei Akazawa, who has led Japan’s tariff negotiations with the United States, and Economic Growth Strategy Minister Minoru Kiuchi, who favors active fiscal spending.Under Katayama, Japan has repeatedly intervened in the foreign exchange market to support the falling yen, including through a rare joint intervention with the United States.The small-scale reshuffle comes as Takaichi navigates rising inflation and a weak yen while pursuing a consumption tax cut on food beginning next year.Although Takaichi’s tax cut pledge is popular among voters, economists have criticized the plan, warning that she has failed to identify the roughly 5 trillion yen ($32 billion) needed annually to fund it.Takaichi’s policy of expansive government spending — as well as the Bank of Japan’s relatively low interest rates — has also rattled markets, pushing Japan’s benchmark bond yield to around 3%, its highest level in three decades.“We will ensure market confidence by strengthening communication” with voters and market participants and explaining policy “with a high level of transparency,” she said when asked about concerns over the sustainability of her fiscal policy.On defense, Koizumi remains responsible for updating Japan’s foundational national defense strategy documents while overseeing efforts to increase defense spending.“Revising our strategy is something that has a major impact on Japan’s security and on the entire region,” Koizumi told reporters after his reappointment.He said the Defense Ministry “must marshal all our resources and move forward faster” with the review.Takaichi also appointed Hiroshi Nakatsuka, 70, a member of the coalition partner Japan Innovation Party, as minister in charge of regulatory reform.The Japan Innovation Party formed a ruling alliance with Takaichi’s conservative Liberal Democratic Party in October but had previously chosen not to join her Cabinet.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads