Sanae Takaichi keeps key ministers in reshuffle

Japanese Prime Minister Sanae Takaichi kept her key ministers in a cabinet reshuffle on Thursday as she works to strengthen her ruling coalition and pursue a planned tax cut on food.

A cabinet list announced by Chief Cabinet Secretary Minoru Kihara showed that he would remain in his post, along with Finance Minister Satsuki Katayama, Foreign Minister Toshimitsu Motegi and Defence Minister Shinjiro Koizumi.

Takaichi also retained trade and industry minister Ryosei Akazawa, who has led Japan's tariff negotiations with the United States, and economic growth strategy minister Minoru Kiuchi, who supports active fiscal spending.

The small reshuffle comes as Takaichi faces rising inflation, a weak yen and questions over how to fund a consumption tax cut on food starting next year. Economists have criticised the plan, warning that she has not identified about five trillion yen, or $32 billion, needed each year to pay for it.

Takaichi told reporters that Japan could not maintain sustainable finances without economic growth. She said her government would pursue what she called a responsible and proactive fiscal policy, aiming to increase employment, household income and tax revenue through domestic investment.

Her spending plans and the Bank of Japan's relatively low interest rates have unsettled markets, pushing Japan's benchmark bond yield to around 3.0 percent, its highest level in three decades. Takaichi said her government would try to maintain market confidence through clearer communication and transparent policy explanations.

On defence, Koizumi remains responsible for updating Japan's national defence strategy documents and implementing a push to expand defence spending. He said the review would have a major impact on Japan's security and the region.

Takaichi also appointed Hiroshi Nakatsuka, a 70-year-old member of the Japan Innovation Party, as minister in charge of regulatory reform. The JIP formed a ruling alliance with Takaichi's Liberal Democratic Party in October but had not previously joined her cabinet.