Retention of economic and foreign policy leadership

Japanese Prime Minister Sanae Takaichi announced her first Cabinet reshuffle on Thursday, maintaining continuity in economic, defense, and foreign affairs. Foreign Minister Toshimitsu Motegi and Defense Minister Shinjiro Koizumi both remained in their posts, preserving key personnel responsible for security strategy and bilateral ties with the United States. In the economic ministries, Satsuki Katayama retained her role as Finance Minister, while Minoru Kiuchi stayed on as Minister of Economy and Fiscal Policy. Ryosei Akazawa was also reappointed as Minister of Economy, Trade and Industry, keeping him in charge of trade negotiations with Washington. Chief Cabinet Secretary Minoru Kihara and Economic Security Minister Kimi Onoda also kept their positions. Takaichi framed her second cabinet as an executive team prepared to deliver on previous administrative commitments.

“I will pursue a responsible and proactive fiscal policy to make Japan strong and prosperous.”

New appointments and coalition expansion

The reshuffle introduced several personnel changes across domestic portfolios, replacing Yoshimasa Hayashi with Hisayuki Fujii as Minister of Internal Affairs and Communications. Fujii previously worked as deputy mayor of Hikone and served as an aide to former Prime Minister Yoshihide Suga during the national vaccination program. Takaichi also brought Hiroshi Nakatsuka of the Japan Innovation Party into the cabinet as Minister of Regulatory Reform, formalizing closer cooperation with the government's coalition partner. Takashi Yamashita returned to lead the Ministry of Justice eight years after his appointment under the late Shinzo Abe. Yoshihiro Seki took over the Ministry of Education, Kazuo Yana became Minister of Agriculture, Hiroyoshi Sasagawa was named Environment Minister, and Tatsunori Ibayashi was appointed Minister of Land, Infrastructure, Transport and Tourism. Takaichi addressed the selection of lawmakers previously named in an intra-party financial reporting dispute, stating they had won two subsequent national elections.

“Our trust relationship with the JIP is unwavering.”

Fiscal expansion, currency volatility, and monetary policy

The newly appointed cabinet faces financial market pressure following interest rate movements by the United States Federal Reserve and the Bank of Japan. The yen traded near 155.50 per US dollar on Thursday after reaching 152.89 earlier in September, down from a low near 164 in July. Satsuki Katayama and Minoru Kihara reaffirmed their commitment to orderly currency movements following their joint market intervention with the US Treasury Department on July 31. Yields on benchmark 10-year Japanese government bonds reached approximately 3.0%, while the Bank of Japan prepared to set its policy interest rate to 1.25%. The administration continues to advance a planned reduction in the consumption tax on food products, a policy estimated to cost roughly 5 trillion yen (28 billion euros). Takaichi reiterated her economic approach during a press briefing in Tokyo.

“Without growth, we cannot maintain fiscal sustainability.”

July 2026 low164

Early September 2026 peak152.89

17 September 2026155.5

July 2026 low

164 JPY/USD

Early September 2026 peak

152.89 JPY/USD

17 September 2026

155.5 JPY/USD

Data from the article text