Japan’s next Finance Minister couldn’t resist the wen bears

By Leika Kihara and Makiko Yamazaki

Tokyo (Reuters) – The possible appointment of Satsuki Katayama as Japan’s next Finance Minister could give ReitHink markets pressure on the lower yen but could also help the country’s new leader find new ways to finance bolder economic policies.

Japan’s next prime minister, Sanana Takaichi, has completed the process of appointing Katayama as Finance Minister, local media said on Tuesday, in what was reported to be the first woman to take the role. The report briefly pushed the dollar to around 150.50 yen, before recovering some losses.

In an interview with Reuters in March, Katawama, who was the 66-year-old Finance Minister of Buteron House, said the Japanese Finance Minister, said that the Japanese economic funds raise the real value of the yen closer to 120-130 per dollar.

Those comments were made when the yen’s slide reached multi-decade swings around the dollar to the dollar market expectations of the Bank of Japan. The Yen is currently trading around 151 per dollar.

“Given his past comments, it seems that Katayama likes to bring back a weak yen. The markets may have seen that similar to the view of US Treasury Secretary Scott Bessent,” said Akira Moroga, Chief Market Stratestist at Aozora Bank.

Katayama declined to comment on Tuesday.

Takaichi is set to be voted in as the first female Prime Minister on Tuesday, marking a symbolic breaking of the glass ceiling in a country where men still wield most of the power.

Overpoken, decisive, instivation inider

The former finance minister has responded well to financial issues, Katayama has a knack for currency promomomacy, and previous prejudices and managers working in the ministry that oversees exchange policy.

He is known for his liberality and decision-making, which, compared to former Finance Minister Katsunobu Kato, rarely runs out of text and keeps a low profile.

In a March interview, Katawama asked President Donald Trump’s administration not to seek the yen’s weakness against the dollar.

Indeed, Besster said last week that the yen would regain its footing if the central bank followed “an appropriate monetary policy” with its latest swipe at a slower pace.

Katawama’s appointment comes at a time of rising living costs, blamed in part on higher import prices caused by the weaker yen. Those things hurt the households and ratings of the ruling party.

As a former bureaucrat, Katawama knows very well the inner workings of the budget budget.

While his background in the financial service may push them to call for fiscal discipline, some analysts say they could use his expertise to help Tamaichi find ways to boldly fund his finances.

“I’m not sure Katayama is an advocate of broad monetary policy, but his views are deep and perhaps align with those of Takaichi,” said Hiroyuki Machida, director of Japan FX and commodity trading at ANZ.

“He will be able to find sources of income if Takaichi wants to increase spending,” he said. “Personally, I think this appointment will speed up ‘Takaichi-Trade’.”

The challenge for Takaichi will be to pursue an expressive monetary policy without creating an unfavorable slide in the yen. It is not yet known whether he will agree to go around the BoJ’s plan to gradually raise interest rates from the current levels of 0.5%.

In a March interview, Katayama said there are limits to what monetary policy or monetary intervention can cause a fall in the fall, calling instead of increasing underlying growth.

Markets will focus on Katayama’s view on whether the BoJ should continue to raise interest rates, which would raise the effective cost of Japan’s debt but help keep the yen from falling.

“Katawama is a financial bureaucrat and well-informed in the affairs of the Ministry,” said Eiji Douke, Chief Fixed Decice Strategist of SBI Securities. “He is almost neutral on monetary and fiscal policy.”

(Reporting by Leika Kihara and Makiko Yamazaki; additional reporting by Yoshifumi Takemoto; Editing by Sam Holmes)