Katayama indicates fiscal measures could ease price growth without further monetary tightening, supporting JPY stability.
Japan’s Finance Minister Satsuki Katayama stated tax policy adjustments may help curb elevated inflation, reducing pressure on the Bank of Japan to tighten monetary conditions. The remarks came during European trading hours on Wednesday, alongside assurances of U.S. support for Japan’s policy management.
Recent inflation trends in Japan have diverged from global peers, with the BoJ maintaining ultra-loose policy until 2024. Market participants have closely monitored the central bank’s gradual shift away from negative rates, which has provided limited support to the JPY amid widening yield differentials with U.S. bonds.
Katayama also noted defense spending decisions typically finalize in December and emphasized improving market communication. The yen’s trajectory remains tied to BoJ policy divergence, intervention risks, and risk sentiment among traders.