The Japanese government has launched efficiency reforms, coordinating fiscal monetary policy.

On December 2nd, the Japanese government made a big move - launching a local version of the “Efficiency Reform Department”. The first meeting went straight to the point: identifying those inefficient tax policies and subsidy programs, cutting what needs to be cut, and optimizing what can be optimized.

The Finance Minister, Katsuyuki Katayama, said frankly during the post-meeting interview: “We need to spend every penny wisely and draw a clear line from the previous government's practices. This is not just a matter of saving money; it also relates to everyone's confidence in the country, in the yen, and in the entire market.” It sounds like this government is serious about making changes.

Interestingly, after the Bank of Japan Governor Kazuo Ueda sent a signal that “the economic outlook is good, and interest rates may need to be raised,” Katsuyuki Katayama specifically emphasized: there is no divergence between the government and the central bank in economic judgment. Economic Growth Strategy Minister Shunichi Suzuki also reiterated this point—clearly a statement unified by the Cabinet, aimed at reassuring the market.

The fiscal reform combined with monetary policy adjustments in Japan is worth ongoing attention.