Japan's Economy Minister: Japan Has Exited Deflation, Calls on Investors to Reassess
nashnova research
Economy Minister Minoru Kiuchi said on October 15 that Japan has left decades of deflation behind and is shifting to a growth-driven economy — but he still needs to convince markets that bigger spending won't mean looser fiscal discipline.
What did the minister actually say?
At a Reuters event in Tokyo, Kiuchi declared Japan is transitioning from the deflation era to a "new, growth-oriented economy."
His target audience: global investors. He said directly, "I encourage you to assess Japan based on this changing reality."
This means → Tokyo wants markets to drop the thirty-year "Japan = deflation" pricing framework and re-value Japanese assets as a growth economy.
Why does "active fiscal policy" make markets nervous?
Kiuchi has long been associated with policy circles that advocate aggressive fiscal spending to end deflation, and Prime Minister Sanae Takaichi's government is known for expanding public outlays.
The core market worry: more spending = looser fiscal discipline = rising Japanese government-bond risk.
Kiuchi addressed this head-on: "Some hear 'active fiscal policy' and assume it means loose fiscal discipline — that is not what we are pursuing."
How does he square the circle?
The logic chain: strategic investment → higher growth potential → rising wages and income → growing tax revenue → fiscal sustainability.
In plain terms = the government's argument is "we're not spending blindly — spend in the right places, grow the pie, and tax receipts follow."
This reflects Tokyo's attempt to build a narrative that lets stimulus and fiscal discipline coexist in market perception.
Where is the money going?
The government's growth strategy targets more than ¥370 trillion in combined public-private investment by fiscal year 2040.
Priority sectors: semiconductors, AI, quantum technology, and content industries.
This means → this is a sector-specific bet, not a blanket stimulus — but markets will ultimately judge whether fiscal discipline can hold inside an expansionary framework. That is the make-or-break test for the entire narrative.
市场有风险，内容仅供研究参考，不构成投资建议。