Japan economy minister says deflation era is over, urges investor rethink

Japan's Economy Minister Minoru Kiuchi said the country is no longer in a deflationary period, urging global investors to reassess the economy as Prime Minister Sanae Takaichi's government prioritizes growth and strategic investment.

“Japan is no longer the same economy it was during the long years of deflation,” Kiuchi said at the Reuters NEXT Newsmaker event in Tokyo on Thursday. “I would encourage you to assess Japan on the basis of this changing reality.”

Kiuchi said the government's growth strategy would combine strategic investment with fiscal discipline. “Some may hear the phrase ‘proactive public finances’ and assume it means lax fiscal discipline, but that is not what we are pursuing,” he said.

The government plans to mobilize more than ¥370T ($2.34T) in public and private investment by fiscal 2040, targeting sectors including semiconductors, artificial intelligence, quantum technologies, and content industries.

Kiuchi's latest remarks follow his October 2 statement that Japan no longer needs excessively loose monetary policy to push inflation higher. “Japan has emerged from an era where it needed the kind of reflationist policies taken under Abenomics,” he said, referring to the economic program of former Prime Minister Shinzo Abe.

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