Minister Sanae Takaichi said Japan no longer needs policy to stimulate inflation as the economy isn’t in a state of deflation anymore, echoing a comment made recently by US Treasury Secretary Scott Bessent.

“Japan’s economy is no longer at a stage where it needs reflationary policies with monetary easing and fiscal expansion,” Takaichi said in response to questions in parliament Thursday. Her policy “differs from so-called reflationary policy,” she said.

Takaichi’s government has sent a series of signals lately that it is moving beyond reflationary policy, following Bessent’s remarks that Japan should leave efforts to reflate the economy behind. Bank of Japan Governor Kazuo Ueda also said last month that the central bank’s policy phase has shifted, with more focus now needed on upside price risks.

What remains unclear is whether that shift means the government is also comfortable with the BOJ continuing to raise rates at a faster pace now widely expected by investors. Swap contracts imply that investors see around a 90% of probability for another rate hike by December. “I have utmost respect for the autonomy of the BOJ,” Takaichi said.

The remarks come as Ueda has completed most of his term, leaving him 18 months to shape a key part of his legacy: whether he can finally stabilize inflation around the bank’s 2% target while under close scrutiny from Takaichi and Bessent.

The Treasury secretary has been unusually vocal about policy in Japan, having helped Tokyo support the yen this year, including the first joint intervention to prop up the currency in 28 years in July. Bessent has said that Japan should keep normalizing policy away from ultralow interest rate levels aimed at stimulating inflation. Higher rates would help the yen find an appropriate level, he has indicated.

Among recent comments from government officials distancing themselves from ultraloose policy, Finance Minister Satsuki Katayama said that Takaichi wasn’t a reflationist, a label she has long been associated with.

Growth Strategy Minister Minoru Kiuchi, who is also widely associated with easy fiscal and monetary policy, also said the nation no longer needs a reflationary policy, a view echoed by Masazumi Wakatabe, a member of Takaichi’s key economic panel.

Japan’s inflation is expected to pick up toward 3% toward early next year. The core inflation gauge has stayed above the BOJ’s 2% target on an annual basis for four straight years through 2025. The bank’s latest inflation forecast also shows it staying above 2% in coming years.

Ueda’s five-year term ends in April 2028. So far, he has accomplished more than many BOJ watchers imagined when he took office. He dismantled the central bank’s massive monetary easing program, including the world’s last negative interest rate and a yield curve control framework, at a much faster pace than expected and without buckling markets.