The sting in the tail of Japan’s lost decades

Prime Minister Takaichi announced that Japan must move away from an excessively tight fiscal stance, signalling a shift toward higher spending. InvestingLive reported the call as a departure from the decades‑long emphasis on fiscal restraint. The Financial Times described the shift as the sting in the tail of Japan’s lost decades, while The Guardian warned of a possible Liz Truss‑style shock if the spending spree strains fiscal balances.

Reuters Breakingviews and Yahoo Finance Australia noted that the government’s “Strong and Rich” strategy could enlarge yen swings and affect market participants. Both outlets highlighted uncertainty over how bigger yen fluctuations might influence investors and exporters. The debate now focuses on balancing stimulus with debt sustainability, as investors watch for signals of fiscal loosening and the government prepares to roll out the spending plan.

Officials have yet to outline specific timelines, leaving market observers to gauge the pace of policy implementation. The next steps will test whether the new fiscal direction can revitalize growth without triggering the fiscal shock the Guardian likened to the UK experience.