TOKYO: Japanese Finance Minister Satsuki Katayama is set to remain in her position in an upcoming cabinet reshuffle, according to local media reports, a decision that would back her handling of the economy, the currency and a restructuring of the budget process.
Katayama will stay on her role after the revamping of the cabinet lineup expected later this month, according to reports by the Mainichi, NTV and Reuters.
Katayama is a key player in Prime Minister Sanae Takaichi’s cabinet and the counterpart of Treasury Secretary Scott Bessent. While Bessent has applied increasing pressure on Japan to raise interest rates he has also helped Japan prop up the currency.
Her re-appointment would represent Takaichi’s vote of confidence in Katayama’s handling of policy and a bid to ensure that the freshening up of the cabinet doesn’t cause any market ripples. Replacing Katayama would have likely disturbed the close cooperation between the US and Japan on the currency and unsettled markets already on edge about Tokyo’s spending plans. That could have renewed upward pressure on bond yields and weakened the yen.
Since her appointment last October, Katayama has played a central role in trying to control slides in the yen and reassure investors as Takaichi’s ambitious spending plans repeatedly stirred concerns over Japan’s public finances.
At the end of July she helped secure the first coordinated US-Japan currency intervention to support the yen since 1998. That was a notable achievement given Washington’s traditional reluctance to intervene in foreign-exchange markets.
The joint action sent a powerful signal that the two countries were prepared to act together.
Katayama has repeatedly met Bessent since taking office, sometimes referring to him by his first name in a sign of their close working relationship. Speaking of her recent meeting with Bessent at the Group of 20 finance ministers meeting in North Carolina earlier this week, Katayama said Friday (Sept 4) that Bessent had spoken highly of Takaichi’s economic policies and hadn’t challenged her on the nation’s fiscal plans.
A former Finance Ministry bureaucrat well-versed in the markets, Katayama has paid particular attention to managing investor concerns.
Earlier Friday she unveiled the tally of requests for next year’s budget after a major rehaul of the formulation process that she has characterized as the biggest since the end of World War II. - Bloomberg
