Prime Minister of Japan

A member of a panel advising Japan's prime minister says the planned expansion of the country's defense spending will likely be phased in over many years, and should not become a source of significant market anxiety in any single year. The comments are aimed at reassuring investors and the public about the pace and financial impact of Japan's defense buildup.

Trading began at the Tokyo Stock Exchange following the Liberal Democratic Party's election of a new leader. Investors were watching the leadership result closely, since the winner is set to become Japan's next prime minister and their policies could shape fiscal spending, monetary policy and market direction. The vote had prompted attention across Japanese financial circles.

Japan's finance minister stated that Prime Minister Sanae Takaichi is not a reflationist, aiming to calm investors who fear her government will spend excessively and pressure the Bank of Japan into keeping interest rates low. Markets have been watchful of Takaichi's fiscal stance, given expectations of expansive spending under her leadership. The remark is an attempt to reassure bond and currency investors that monetary discipline will be maintained.