Japan’s new Prime Minister Sanae Takaichi pledged to pursue an “aggressive” fiscal policy to spur growth and strengthen national security, outlining her economic and defence priorities in her first policy speech to parliament on Friday, Kyodo News reported.
Takaichi said her government would take bold measures to stimulate domestic demand and shield households from global economic volatility.
She also announced that Japan would raise defence spending to 2 percent of GDP two years ahead of schedule, accelerating the country’s biggest military expansion in decades.
During her address, opposition lawmakers repeatedly interrupted her remarks, while members of the ruling Liberal Democratic Party (LDP) and her supporters applauded her vision. Takaichi, elected on Tuesday, is Japan’s first female prime minister.
Inflation pressures add to economic challenges
Takaichi’s speech came as fresh data showed Japan’s inflation continuing to outpace the Bank of Japan’s (BOJ) 2 percent target.
Government figures released on Friday showed annual core inflation—which excludes fresh food prices—rose to 2.9 percent in September, up from 2.7 percent in August.
Headline inflation matched that figure, climbing to 2.9 percent, while the BOJ’s preferred “core-core” index, excluding both energy and fresh food, eased slightly to 3 percent from 3.3 percent.
The rise marks the 41st consecutive month that inflation has exceeded the BOJ’s target, underscoring the delicate balance Takaichi faces between fiscal expansion and monetary tightening.
Rice prices, a key inflation driver earlier this year, have started to cool, rising 49.2 percent year-on-year in September compared with 69.7 percent in August and more than 100 percent in May, the steepest increase in five decades.
Japan, the world’s fourth-largest economy, has pledged around $70 billion in defence spending this fiscal year, equivalent to roughly 1.8 percent of GDP.
