Economy Minister Minoru Kiuchi said in a Monday interview Japan’s spending plan
will provide long-term support for the yen, rejecting market concerns about the
country’s fiscal position. He said fiscal policy “is not as expansionary as you
think,” stressing sustainability and calling the approach responsible and
proactive. Kiuchi said higher investment and greater demand for yen assets
should lift yen demand and that the BOJ has acted appropriately. Market
participants remain skeptical about the size of the large spending package and
potential government influence on the BOJ. The government’s end-June growth
roadmap covers 17 sectors but has not disclosed how much investment will be
public versus private.
