Japan's finance minister said Prime Minister Sanae Takaichi is not a reflationist, pushing back against investor concerns about the government's spending plans and its influence on the Bank of Japan. Speaking exclusively to Bloomberg TV's Shery Ahn in Tokyo, the minister said Takaichi has explicitly instructed her to tell people overseas that she is not a reflationist and that she has great respect for the central bank's independence. On the yen, the minister said Japan will intervene in cases of disorderly conditions, excessively speculative moves, excessive volatility or a disorderly market, and that the stance of taking bold action remains in place even at this very moment. Asked about the fiscal picture, the minister said the current rise in government bond yields is not driven solely by factors in Japan and is not expected to last that long, adding that the government has already factored in some higher fiscal spending costs. On defense, the minister said the decision to revise the three key defense documents this year is not a response to international pressure, including from the United States, and that neither the Defense Ministry nor the United States has ever told Japan anything along the lines of the 3.5% of GDP figure Bloomberg reported.
Finance minister reiterates readiness to intervene against disorderly/speculative yen moves, signaling support for the yen.
Minister downplays reflation concerns and says the JGB yield rise is not solely Japan-driven and won't last long, giving no clear directional signal for 10Y yields.
